Gostich, Michael v The Serbian Community of South Australia Inc

[1997] FCA 1502

FEDERAL COURT OF AUSTRALIA

Industrial Law - termination of employment - review under section 377 - complaint of unlawful termination - whether valid reason for termination - whether a reason for termination included temporary absence from work because of illness - failure to return from leave on date stipulated by employer.

Workplace Relations Act 1996 (Cth) (formerly Industrial Relations Act 1988), ss 170DB, 170DC, 170DE(1), 170DF(1)(a), 170EDA, 170EE

Matter No. SG43 of 1997

MICHAEL GOSTICH v THE SERBIAN COMMUNITY OF SOUTH AUSTRALIA   INC.

VON DOUSSA J
ADELAIDE
22 DECEMBER 1997

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SG 43  of   1997

BETWEEN:	MICHAEL GOSTICH APPLICANT
AND:	THE SERBIAN COMMUNITY OF SOUTH AUSTRALIA INC. RESPONDENT
JUDGE:		VON DOUSSA
DATE OF ORDER:		22 DECEMBER 1997
WHERE MADE:		ADELAIDE

THE COURT ORDERS THAT:

1. The decision of the Judicial Registrar made on 23 May 1997 be set aside.

2. Judgment for the applicant, Michael Gostich, be entered against the respondent, the Serbian community of South Australia Inc. in the sum of $9,726.00 which sum is to be paid within 14 days.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SG 43 of 1997

BETWEEN:	MICHAEL GOSTICH APPLICANT
AND:	THE SERBIAN COMMUNITY OF SOUTH AUSTRALIA INC. RESPONDENT

JUDGE:	VON DOUSSA
DATE:	22 DECEMBER 1997
PLACE:	ADELAIDE

REASONS FOR JUDGMENT

By notice of motion filed on 13 June 1997 the applicant, Mr Gostich, seeks review under s 377 of the Workplace Relations Act 1996 (“the Act”) of a decision of a Judicial Registrar delivered on 23 May 1997. The jurisdiction of this Court to conduct the review arises by operation of schedule 16 of the Workplace Relations and Other Legislation Amendment Act 1996 (Cth).

The proceedings were commenced by application filed in the Australian Industrial Relations Commission under s 170EA(1) of the Act by an Industrial Officer acting for Mr Gostich on 7 August 1997. The application sought relief in respect of an alleged unlawful termination of employment. The proceedings were referred to the Court pursuant to s 170ED(1) on 26 August 1996.

The employment and the termination
Mr Gostich is a qualified social worker.  In about November 1994 he was employed by the respondent, The Serbian Community of South Australia Inc. as a part-time grant-in-aid welfare worker to assist persons of Serbian descent who may have had problems of a social kind by referring them to appropriate agencies and organisations.

The respondent is an incorporated body which acts as an umbrella organisation for its member associations.  Its objects include establishing, maintaining and promoting brotherly relationships with member organisations and through them with all Serbians in South Australia, promoting Serbian culture and traditions, helping and promoting welfare of Serbian Youths, helping newcomers to South Australia integrate into the community, and helping aged and incapacitated people.  One of the members of the incorporated body is the Free Serbian Orthodox Church “St. Sava” at Hindmarsh (“the Church”).  The affairs of the respondent are conducted by an elected committee, and the evidence indicates that the members of the committee, or at least many of them, are also actively engaged in the affairs of the Church.

Mr Gostich’s contract of employment gave an entitlement to four weeks annual leave which could be taken one year from the date of commencement.  As it happened, however, Mr Gostich took approximately seven weeks leave in mid-1995, some of it being paid leave due at that time, and the balance unpaid leave granted to him by the committee then in office.

In December 1995 there was a change in membership of the committee, and it is clear that the change brought with it disharmony between of the new committee (“the committee”) and Mr Gostich.  That disharmony appears to have been aggravated by feelings that were running high in unrelated litigation between factions in the Serbian community (“the Welfare Association litigation”).  It seems that Mr Gostich did not share the views of the new committee members about the merits of that litigation.

During the first half of 1996, Mr Gostich applied to the committee for seven weeks leave to commence on 8 July 1996.  Mr Gostich sought four weeks annual leave and three weeks leave without pay to enable him to travel overseas with his family.  The committee refused his application and informed him that it would grant only two weeks paid annual leave.  Acrimonious communications followed between the parties, but the respondent, through the committee, remained firm.  The respondent’s final communication to Mr Gostich on the topic was by letter incorrectly dated 9 July 1996.  Mr Gostich received the letter on 8 July 1996 on the eve of his departure overseas.  He and his family were booked to leave on 9 July 1996.

The letter incorrectly dated 9 July 1996 raised a number of outstanding matters in dispute between the parties but, of immediate relevance, said:

“Our decision is not to grant your request - we confirm that we have given you 2 weeks annual leave before it fell due to assist you - you will be required to commence employment at your usual place of employment on Thursday 25/7/96 otherwise your employment will be terminated - the decision is now final on this matter and you are further warned to attend employment on the said date.”

On 25 July 1996 Mr Gostich did not attend for work. 

The committee met on the evening of 25 July 1996.  It now appears that no enquiry was made of anyone outside the committee as to why Mr Gostich had not returned to work on 25 July 1996.  Following the meeting, by letter dated 25 July 1996 addressed to Mr Gostich at his home address at Grange, the respondent wrote to him in the following terms:

“Dear Sir,

Re:        Your Employment as GIA Worker

We advise that we were present at the Migrant Resource centre today and you did not attend for work as required by our direction to you in our letter dated 9/7/96.

Further, you did not respond to our request for a written report regarding the issue of your salary overpayment.

Further you did not supply us with a written report as regards the existence of various blank (but signed) contracts of employment.  There is serious concern by committee members that you have conspired to commit a fraud and your lack of response can only be interpreted as not taking these matters seriously.

Further, we requested you to provide a written report on the Emergency Relief monies - again no response was received from you.

You have made no reasonable effort to comply with our directions on matters of great importance.

We note that you did write (responding to our letter of 9/7/96) to complain to us that you felt that we were victimising you and you made no reference whatsoever what you would be doing regarding these reports.  We can come to no other conclusion other than you do not value your job with us.

As if the above problems have not been enough, you attacked a 76 year old pensioner in February this year, recently you threatened to shoot members of our committee and you have attempted to interfere with witnesses of your assault trial.  You have also been warned.

In the circumstances we are notifying you that your employment with our association will be terminated forthwith.

If there is any outstanding employee entitlements we will be happy to pay you accordingly and we suggest that you make your claim.

Yours faithfully,

(Sgd) Mrs. Ratka Rakich
Secretary”

The respondent maintains that the summary termination of Mr Gostich’s employment on 25 July 1996 was justified in law, and therefore not unlawful.

On the other hand Mr Gostich, in the proceedings brought by him under Division 3 of Part VIA of the Act has from the outset alleged that there was no valid reason for the termination within the meaning of s 170DE(1) of the Act, and in particular that his employment was terminated for reason of, or for reasons which included, temporary absence from work because of illness contrary to s 170DF(1)(a). Further, his allegations include that he was not given an opportunity to defend himself against allegations made regarding his conduct or performance contrary to s 170DC, and that he was not given the required period of notice as required by s 170DB.

By a direction of the Judicial Registrar, the respondent became dux litus at the trial.  The respondent led evidence seeking to justify the various allegations made against Mr Gostich in the letter dated 25 July 1996 which terminated his employment.  In consequence the trial ranged over numerous issues.  These issues were emotive and highly contentious amongst different groups in the Serbian community.  Evidence was led about a meeting between Mr Gostich and the new committee on 15 January 1996, about the litigation between members of the Serbian community, about the alleged assault by Mr Gostich on a 76 year old pensioner, about an alleged overpayment of salary (and an underlying dispute as to which of many signed contracts of employment was the genuine one), about threats to the committee by Mr Gostich, and about his application for leave.  Evidence on these topics is summarised in the reasons for decision delivered by the Judicial Registrar.  The parties now acknowledge that these issues are not essential to the resolution of the claim for unlawful termination made by Mr Gostich, and for that reason it is not necessary to canvass again the evidence about them.

On the crucial question concerning Mr Gostich’s failure to return to work, he gave evidence before the Judicial Registrar that he became ill overseas.  He said he had consulted doctors, and made attempts to notify the respondent of his illness and inability to return to work on the date required.  His son Richard gave evidence that he had passed on a message to this effect to one of the committee members, Mr Tepavcevic.  Mr Tepavcevic denied that he had been so notified.  Mr Gostich also gave evidence that all the matters raised by the respondent as reasons for terminating his employment were complete fabrications, the real reason for his dismissal being his refusal to change sides and give allegiance to the interests of the committee members in the Welfare Association litigation.

The Judicial Registrar said that the matter necessarily involved important issues of credibility, and expressed her view that she found Mr Gostich not to be a credible witness.  On the other hand she considered the demeanour of the respondent’s witnesses to be such as to give her no cause for concern.  She did not accept Mr Gostich’s evidence that he intended to return to work on 25 July 1996 when he departed from Australia.  She said that his evidence about his illness overseas was uncorroborated.  Although it was very likely that he did see a doctor whilst overseas, she was not satisfied that Mr Gostich was in fact ill.  Rather, it was her view that Mr Gostich arrogantly assumed from the outset that he would be granted seven weeks leave by the committee as he had been by the previous committee in 1995.  When that leave was refused, he simply decided to take the holiday in any event.

The Judicial Registrar concluded that Mr Gostich’s failure to return to work provided a valid reason for the termination of his employment. His failure to return from his holidays on the required date constituted serious misconduct. Accordingly, no breach had occurred of any of the sections of the Act relied upon by Mr Gostich.

Proceedings on the review
On 11 July 1997 a judge of this Court ordered that the review be conducted by affidavit, and gave directions about the filing of affidavits first by the respondent, then by Mr Gostich, and then by the respondent in reply.

Pursuant to this direction (although belatedly) an affidavit was filed by Tomislav Popovic as president of the respondent.  That affidavit confined the issues for consideration.  It identified correspondence between the parties relating to Mr Gostich’s application for leave, and deposed that he did not return to work on 25 July 1996 as required by his employer, and that prior to 25 July 1996 he did not make contact or communicate with any member of the committee to advise that he was ill or could not, for that or any other reason, return to work on 25 July 1996.  The affidavit concluded with the following statement in para 19:

“The respondent says that, in failing to return to work on 25 July 1996, the applicant abandoned his employment or, additionally, was guilty of serious and wilful conduct (sic) and there was thus a valid reason for his termination...”

The affidavit referred to the trial before the Judicial Registrar, and exhibited a copy of the transcript of evidence.

Four affidavits were filed by Mr Gostich in support of his case.  In his affidavit sworn on 3 November 1997, Mr Gostich deposed to the onset of his ill-health which led to him being unable to return from Yugoslavia until 17 August 1996.  There was an affidavit from Mr Gostich’s wife who had accompanied him overseas, and another from his son Richard.  Richard deposed to his father’s instructions, before he left Australia, to his travel agent to arrange for his return in time for work on 25 July 1996. He also deposed to the steps which Richard took when he learned of his father’s ill-health on 19 July 1996 to inform the respondent and alter his father’s travel arrangements.  The final affidavit was from Mr Ian Stanley Heard, an industrial officer, who had communicated with the respondent on the applicant’s behalf regarding his leave prior to 9 July 1996.  He deposed to receiving correspondence and medical certificates which had been sent to him by Mr Gostich on 20 July 1996 from Yugoslavia, although he did not receive them until 7 August 1996. 

Two affidavits in reply were filed on the respondent’s behalf, a further affidavit from Mr Popovic, and an affidavit from Mr Tepavcevic in which he asserted that he had no knowledge of ill-health on the part of Mr Gostich immediately before Mr Gostich left Australia. Mr Tepavcevic also denied that he had received any notification from Richard Gostich prior to 25 July 1996 that Mr Gostich would be unable to return to work on 25 July 1996 on account of ill-health. 

Section 170DE(1) provides that an employer must not terminate an employee’s employment unless there is a valid reason, or valid reasons, connected with the employee’s capacity or conduct or based on the operational requirements of the undertaking, stablishment or service. Section 170DF(1) provides that an employer must not terminate an employee’s employment for any one or more of the reasons set out in the subsection, or for reasons including any one or more of those reasons. One of those reasons is “temporary absence from work because of illness or injury”. These two provisions must be read together. It is plain from the letter dated 25 July 1996 terminating Mr Gostich’s employment, from Mr Popovic’s first affidavit, and from the evidence, that the main reason for Mr Gostich’s dismissal was his failure to return to work on 25 July 1996. In the context of this case, the question which therefore arises is whether Mr Gostich’s absence from work on 25 July 1996 was a temporary absence because of illness. In my opinion the first affidavit of Mr Popovic correctly confines the issue for determination in these proceedings to this question.

If Mr Gostich’s absence for work on 25 July 1996 were a temporary absence because of illness, the termination of his employment was in breach of s 170DF(1)(a), and was not for a valid reason.

Moreover, the only conduct asserted against Mr Gostich which could amount to serious and wilful misconduct justifying his immediate dismissal on that day was his alleged failure to return to work because, as a matter of defiance, he had decided to extend his holidays beyond the date decreed by his employer.  If his failure to return on the required date were due to illness, not deliberate defiance, it could not amount to serious or wilful misconduct.  The other matters of alleged misconduct were such that s 170DC would have required the employer to give Mr Gostich an opportunity to defend himself against the allegations before there could be a valid ground for terminating his employment.  Although requests had been made in correspondence to Mr Gostich for explanations of some matters, at no stage had he been told that his employment was under immediate threat on account of those matters, nor, in some instances, were those matters directly related to his employment.  More importantly, even if Mr Gostich had been given an adequate opportunity to respond to one or more of those allegations, and had not done so satisfactorily, the respondent could not have lawfully terminated his employment on 25 July 1996 if, as was plainly the case, an additional reason for his termination was absence from work, provided that absence was a temporary one because of illness.

Although I do not think that the outcome of this review turns on which party carries the onus of proof, it should be noted that pursuant to s 170EDA(1) and (2) the onus of proof lies on the employer to establish that a valid reason existed under s 170DE(1) and that Mr Gostich’s employment was not terminated on 25 July 1996 for a reason which contravened s 170DF(1).

Although the direction made on 11 July 1997 was that the review be conducted on affidavit, in my opinion the transcript of the proceedings and the exhibits tendered before the Judicial Registrar form part of the material to be considered on the review.  There are three reasons for this.  First, although the review is by way of a hearing de novo, it is nevertheless a review on the evidence available to the Court.  Normally, that will comprise the evidence led at first instance, as supplemented by additional evidence which the parties seek to place before the Court reviewing the order.  It is on this material that the reviewing Court begins afresh to form its own conclusions and to exercise for itself any discretion that was vested in the Registrar below.  Secondly, the transcript in this case was exhibited to the affidavit of Mr Popovic and thereby introduced into the review, presumably as sworn evidence of relevant facts already received in the proceedings.  Thirdly, the review has been conducted on the footing that although the principal witnesses were recalled so that as reviewing judge I could, if necessary, form a view about their demeanour for the purposes of assessing credibility, the background facts and uncontentious evidence was to be gathered from the transcript below.

On the review new evidence was tendered that was not before the Judicial Registrar, evidence which, in my view, is of considerable importance.  In particular the Court now has a medical certificate from Dr Chia dated 4 July 1996, and translations of medical certificates from Dr Titus Mozar concerning an examination of Mr Gostich in Switzerland on 10 July 1997 and from a cardiologist, Dr Stevan Kanacki who examined Mr Gostich in Yugoslavia on 19 July and 9 August 1996.  Further, there is evidence from Mrs Gostich and from Mr Heard which provides support for Mr Gostich’s evidence.

I summarise below the material parts of the evidence which constitute the case presented on behalf of Mr Gostich at the review.  Allegations made by him as to events which occurred appear to be supported by correspondence, medical certificates and evidence from his wife and son and Mr Heard.  On the surface, the evidence appears to present a comprehensive, detailed and probable picture which, in the ordinary case, would not be subject to doubt.

The respondent however contends that the allegation of illness is false.  It alleges that the attendances by Mr Gostich on the doctors, the arrangements he made about plane bookings, and his correspondence are all part of an elaborate plan hatched in about May 1996 to ensure that Mr Gostich had seven weeks overseas with his family.  The Court is invited to hold that Mr Gostich at all stages from the commencement of the plan intended to be overseas throughout the seven week period commencing 9 July 1996, and that when he realised that his employer would not grant him leave, he attended doctors to support his false claim of illness as his excuse for not returning by 25 July 1997.

The primary facts concerning Mr Gostich’s application for leave, the correspondence between the parties, and the events which occurred leading up to his departure from Australia on 9 July 1996, with only one exception, are no longer the subject of dispute.  That one exception concerns whether Mr Tepavcevic was told by Richard Gostich that his father had taken ill and would not be returning to work on 25 July 1996.

I now summarise the undisputed primary facts, and also, in some instances, disputed evidence about certain other facts.

• 15 January 1996—Mr Gostich informed the respondent’s new committee that he would be seeking leave in mid-1996.  He was asked to apply for leave in writing in due course.

• 9 May 1996—Mr Gostich consulted his travel agent Mr Ilic regarding travel to Yugoslavia, proposed departure 9 July 1996.  It seems probable that a tentative booking was made for Mr Gostich, his wife and two of his children to leave Australia on that day, and to return on 22 August 1996.  However, Mr Ilec, who gave evidence before the Judicial Registrar, says that even then Mr Gostich was seeking an earlier return date, but 22 August 1996 was the earliest date upon which the airline could confirm a return booking for four people.

• 11 May 1996—Mr Gostich applied to the respondent in writing for four weeks annual leave and three weeks leave without pay from 8 July 1996 to 23 August 1996.

• 27 May 1996—Respondent advised Mr Gostich in writing that the respondent would agree to give two weeks annual leave in July 1996 and the remaining two weeks of annual leave would be granted in November 1996.  Leave without pay was refused.  The letter also complained to Mr Gostich that his record showed that he had taken fourteen days sick leave from 3 April 1996, and a further two days in December 1995, so that his sick leave entitlement had been exceeded.

• 10 June 1996—Mr Gostich wrote to Mr Popovic as president of the respondent.  The letter covered a number of matters between the parties but included the following: 

  ”In addition to my letter of 11 May 1996 I wish to make a slight alteration regarding my annual leave.  I have been advised that I will qualify for 2/3 of my annual leave which will total 18,6 days on 7 July 1996.  Therefore I will commence my annual leave on Wednesday the 10th day of July 1996 and be ready for work on Wednesday 31 July 1996.  If the Association has no money to pay my annual leave dues I am prepared to wait until November 1996.

  Now I take this opportunity to make one last plea to you and the Committee to allow me three-and-a-half (3,5) weeks of leave without pay on compassionate grounds, ending on Friday 23 August 1996.  I understand that the funding agency has no objections to this request and will in fact provide funding for you to employ a locum GIA worker in my leave-without-pay absence.  The negative decision in Mrs Rakich’s letter has been devastating to me for the following reasons:”[four reasons are then set out]

• 27 June 1996—Mr Gostich paid Mr Ilec for the airline tickets for himself and his family, and was issued with set travel itineraries.  They would leave Adelaide together on 9 July 1996 by Singapore Airlines, arriving in Zurich 10 July 1996 and departing for Belgrade on 12 July 1996.  The return flight for Mrs Gostich and the children was confirmed for 22 August 1996.  The return flight for Mr Gostich was to depart Zurich on 1 August 1996, and arrive in Adelaide at 6.20 a.m. on 3 August 1996.

• 1 July 1996—Mr Gostich wrote to Mr Popovic seeking a meeting to discuss a number of issues including his outstanding request (of 10 June 1996) for additional leave.  Included in his letter was the following paragraph:

  ”Furthermore, during the pay period ended on Sunday 30/6/1996 I have been compelled to work extra hours due to several factors, which I wish to raise at the requested meeting.  As you know this has happened many times in the past.  I have made a total of 14 hours during the said fortnight.  It appears that I will need to work extra hours this week too, due to a request by a group of newly arrived refugees to address them soon.  It appears that I will make at least 5 hours or more of extra work this week too.  I have never taken any time in lieu for extra work before.  Therefore, according to my contract of 24 October 1994 point 6, I request that the time in lieu be approved as an extra week following my annual leave.  I have also made an offer to the Committee not to pay my annual leave until November 1996 if there is no money for this purpose.  However, there was no response to this offer either.  I understand that the funding agency has no problems with my annual leave or leave without pay.

Had the extra week’s leave in lieu of overtime been granted, the combined period of Mr Gostich’s two weeks leave plus the third week would have got Mr Gostich close to, but not quite to, an entitlement to be absent from work until 3 August 1996.  It is to be remembered that his employment was part time and it seems that there may have been some flexibility in the days he worked.  The meeting sought by Mr Gostich was refused by the committee.

• 4 July 1996—Mr Gostich attended Dr Chia.  In the period preceding this date Mr Gostich had been in conflict with members of the Church who were considering his expulsion from the Church community, and were seeking to have him appear before an “Honours Board” to address complaints made against him.  It seems that this disputation had its genesis in the Welfare Association litigation and in other disputes which arose between Mr Gostich and certain members of the Polish community which included members of the respondent committee.  These disputes arose outside his duties as an employee.  Mr Tepavcevic, besides being vice-president of the respondent, was also president of the Church.  Mr Gostich says that he had a telephone conversation with Mr Tepavcevic during office hours on 4 July 1996.  The conversation was particularly distressing, and he says he commenced to experience sharp pains in his chest.  The symptoms were so severe that he was concerned that he might have a heart attack.  He cancelled his appointments for that day and consulted Dr Chia.  Besides the pain in his chest, he had pain and altered sensation in his left arm.  He says Dr Chia gave him a medical certificate for that day and the following day, in case he felt unfit to return to duties, and prescribed “mersyndol”.  Without objection Mr Gostich gave evidence that the prescription was to calm him down and that the doctor told him he had high blood pressure and that his pains were probably stress related.

• 5 July 1996—The committee summonsed a meeting to consider Mr Gostich’s request for extra leave and to discuss his letter of 1 July 1996.  The committee resolved to write to Mr Gostich confirming the earlier decision to grant only two weeks annual leave.  The respondent introduced into evidence before the Judicial Registrar a letter dated 5 July 1996 from the respondent to Mr Gostich informing him that his request for extra leave beyond two weeks was denied.  Mr Gostich says he did not receive the letter, but on 8 July 1996 received another letter to much the same effect incorrectly dated 9 July 1996.  The probability appears to be that the letter of 5 July 1996 signed by the secretary was not posted, but rather that the president, Mr Popovic, had aspects of the letter redrafted to constitute the letter dated 9 July 1996.

7 July 1996—This was a Sunday.  Mr Gostich and his wife attended the Church.  They had a heated discussion with Mr Tepavcevic, and towards the end of the discussion Mr Gostich says that he told Mr Tepavcevic he was worried about his job security and his health, and that he was in two minds about cancelling his trip but was concerned about losing his money if he did so.  Mr Tepavcevic told him he should go ahead with the trip, and if his health deteriorated he should inform the committee or Mr Popovic.  Mr Tepavcevic denies that a conversation in these terms occurred.  He said most of the conversation concerned Mr Gostich’s possible expulsion from the Church about which Mr Gostich was angry.  He also said that Mr Gostich was upset that the respondent’s committee had only granted him two weeks leave which he was about to take.  Mr Tepavcevic says that Mr Gostich then said words to the effect “by the way what happens if I get sick overseas.  With winter there and summer here anything could happen.  I could get the flu or anything”, to which Mr Tepavcevic replied “well that could happen to anybody.  If you get sick send a certificate, make a phone call to the committee, there shouldn’t be any problems”.  Mr Tepavcevic’s account of the conversation confuses the seasons.  It was winter in South Australia and summer in Europe.
The evidence of Mrs Gostich confirms that of her husband, namely that he informed Mr Tepavcevic that he was worried about his health and what might happen if his condition deteriorated during their overseas holiday.

• 8 July 1996—Mr Gostich received the letter dated 9 July 1996 from the respondent canvassing a number of matters in dispute between them, but, relevantly, saying that his request for extra leave was refused, and that his employment would be terminated if he did not attend work on 25 July 1996.

• 8 July 1996—Mr Gostich attended Dr Ratneike, his general practitioner who had treated him since August 1989.  He said that he was particularly distressed by the letter received that day from the respondent.  He again reported symptoms of chest pain and left arm pain, and also a nose bleed.  Dr Ratneike was called before the Judicial Registrar by the respondent.  She confirmed the attendance of Mr Gostich, and confirmed his complaints of chest pain, left arm pain and nose bleeding.  She said in examination that she attributed these symptoms to anxiety.  She confirmed that he had suffered similar symptoms on earlier occasions which had led to Mr Gostich being referred to a cardiologist in 1985 but no abnormality of the heart was detected.

• 8 July 1996—Mr Gostich wrote to the respondent replying to its letter which he received that day.  Mr Gostich said that he was due to depart overseas on 9 July 1996.  The letter received from the respondent had “caused me considerable stress and I have consulted with my GP in relation to this matter.  I do not believe that this is a pleasant way to approach my annual leave, particularly in relation to my GIA position”.  He said that in relation to a number of the matters raised by the respondent he had asked Mr Ian Heard to contact the respondent.  The letter went on to refer to legal advice that he was obtaining and the prospect of court proceedings between himself and the respondent as the respondent, as his employer, was failing to protect his interests.  He said “I find this deeply distressing and as a result it is having various ramifications on my health and well being.  I urge you to take this final statement with the utmost seriousness that it deserves as two GPs have confirmed that all of this undue pressure and stress is having adverse effects on my health...”.

• 8 July 1996—Mr Gostich wrote to Mr Ian Heard providing information on several topics and requesting him to respond to various matters raised by the respondent.  He concluded that letter by saying “When I return I will contact you.  Please let Tomo [Popovic] know that I will be reporting for work as specified in his - tomorrow’s - letter.  I’ll keep in touch...I will try to enjoy life until 25/7/96”.

• 9 July 1996—Mr Gostich and family left Australia for Zurich from the Adelaide airport.  They left as members of a larger party of overseas travellers organised as part of a package by Mr Ilic.  Mr Ilec was at the airport.  Mr Gostich says that he informed Mr Ilic that the committee had refused his request for extra leave, and that he had to return to work on 25 July 1996.  He asked Mr Ilic to alter his return date.  Mr Ilic said he would attempt to do so but, it is clear that there was no absolute guarantee that a booking could be obtained.

Mr Ilic gave evidence about this conversation.  He said that Mr Gostich had been on a waiting list for a booking for 25 July before this date, but said that following instructions from Mr Gostich received at the airport he made further arrangements and was able to confirm a booking for Mr Gostich to return on 25 July 1996.  It seems that the relevant flight would arrive early in the morning so that it could have been possible, had that booking been used, for Mr Gostich to be at work on 25 July 1996.  The respondent does not argue that if that booking reflected a genuine intention on the part of Mr Gostich to return at that time, he would have been in breach of his employment obligations.  Mrs Gostich, and Richard Gostich, who were both present at the conversation at the airport also confirm that Mr Ilic was instructed to arrange a booking for Mr Gostich to return, ahead of the rest of his family, on 25 July 1996.

• 10 July 1996—Mr Heard wrote to Mr Popovic referring to Mr Gostich’s approach to the respondent seeking “an extra weeks leave to stay overseas”.  Mr Heard referred to the award, and to an employee’s entitlement for time in lieu of overtime.  Mr Heard said that he understood Mr Gostich was travelling overseas to visit his sick father-in-law, and that he was unable to obtain a flight back to arrive in Adelaide until 4 August 1996.  On compassionate grounds he sought an extension of Mr Gostich’s leave to accommodate that booking.  In my view it is apparent that this letter was written by Mr Heard before he received Mr Gostich’s letter of 8 July 1996.

• 10 July 1996—Mr Gostich consulted Dr Mozar in Zurich.  He said that on his arrival in Zurich on 10 July 1996 the symptoms which he had been suffering since 8 July 1996, although at a reduced level, became more intense and he again experienced severe chest pain and pain in his left arm and a tingling sensation in the fingers of his left hand.  The interpretation of Dr Mozar’s certificate and account, indicates that a number of laboratory tests were performed, together with an ECG.  The doctor gave a diagnosis of “cardiac malfunction”.  Mr Gostich said he was prescribed medication, and told to rest. 

• 12 July 1996—Mr Gostich and family travelled to Belgrade, and thence to Pancevo in Serbia to visit his mother.  She made an appointment that day for Mr Gostich to see a local cardiologist, Dr Kanacki.  The first available appointment was 19 July 1996. 

• 19 July 1996—Mr Gostich kept his appointment with Dr Kanacki.  In evidence he said that between 12 and 18 July 1996, whilst he was visiting members of the family and socialising with them, his health felt reasonable, but on the evening of 18 July 1996 he again suffered chest pains and left arm pains.  The certificate from Dr Kanacki says that on 19 July 1996 “the patient is complaining of pains in percordium and a feeling of choking”.  An ECG was performed.  A diagnosis of angina pectoris was made.  Medication including aspirin was prescribed.  Mr Gostich says he was advised to rest, and not to travel to Australia until Dr Kanacki could assess the seriousness of his condition.  The medical certificate issued that day by Dr Kanacki says “resting at home necessary.  In case of stronger pains come back to this centre”.  Dr Kanacki’s certificate indicates that “ergometry test and laboratory testings to be done”.

• 19 July 1996—Mr Gostich wrote at length to Mr Heard informing him of his ill-health, about his consultations with doctors in Adelaide on 4 and 8 July 1996, and about his examinations in Zurich and Pancevo.  He said that he had been advised not to travel, and had a follow-up appointment with Dr Kanacki on 30 July 1996.  He said that Mr Ilic had made a booking for him to leave Europe on 22 July 1996, but his illness would now prevent him from returning.  He asked Mr Heard to pass on the information to Mr Popovic.  In evidence Mr Gostich explained that his relationship with members of the committee had deteriorated to such a point that he thought it desirable to have the communication conveyed by Mr Heard, rather than to attempt communication direct with Mr Popovic.

• 19 July 1996—Mrs Gostich telephoned her son Richard immediately after the medical examination, and asked him to advise Mr Tepavcevic of Mr Gostich’s ill-health and of his inability to return to work on 25 July 1996.  Richard Gostich confirms receiving this message, and there can be no doubt that it occurred as there is evidence from Mr Tepavcevic’s son that Richard Gostich contacted him and said that his father was ill in Yugoslavia.

• 19 July 1996—Richard Gostich telephoned Mr Tepavcevic.  He was not at home but Richard spoke with his son Peter Tepavcevic.  Richard Gostich and Peter Tepavcevic had been to school together some years before and at one time were close friends.  In recent months however because of some disturbance at the Church, they had spoken only infrequently.  Peter Tepavcevic gave evidence before the Judicial Registrar that he received such a call.  He agreed that they had not communicated much in recent times.  He said there was just a general conversation in the course of which Richard said that his father was ill.  Peter Tepavcevic denied that he was asked to pass this information on to his father, and said that he did not do so.  He also denied that Richard asked him to have his father return the call.  He said the fact of the telephone call was not brought to the attention of Mr Tepavcevic senior until much later when Peter Tepavcevic heard his parents discussing the unlawful termination proceedings brought by Mr Gostich.  Peter Tepavcevic said that his father was then cross because the information had not been given to him at the time of the telephone conversation.  Mr Tepavcevic senior in evidence said that he received no information about Mr Gostich’s ill-health from his son until the family conversation about the unlawful termination proceedings occurred.

• 19-25 July 1996—Richard Gostich gave evidence that he made approximately five attempts to contact Mr Ian Heard by telephone to speak with him personally to ensure that he was aware of his father’s ill-health.  He left messages with the reception staff of the union for whom Mr Heard worked.  Mr Heard has notes in his diary of attempting to ring Richard Gostich on 23 July 1996, when he was not available, and having spoken with him on 31 July 1996 when he was informed that Mr Gostich was unfit to travel, and would be “returning on 13th”, presumably meaning that he would be leaving Europe on 13 August 1996.

20 July 1996—Mr Gostich consulted the postal authorities in Pansevo.  He says that he was informed that a registered letter would arrive in Australia prior to 25 July 1996.  He posted his letter to Mr Heard including the medical certificates from Dr Mozar, dated 10 July 1996 and Dr Kanacki, dated 19 July 1996, but without English translations.  The original certificates were tendered before the Judicial Registrar, but without an interpretation she was denied the benefit of the information contained in them.  The postage of the letter in Pansevo on 20 July 1996 at 10.31 a.m. is confirmed by endorsements on the envelope.

• 20 July 1996—Richard Gostich telephoned Mr Ilic and requested him to cancel his father’s booking for the return flight to arrive on 25 July 1996, as his father had taken ill.  Mr Ilic confirms receiving the message, and cancelling the booking.

• 21 July 1996—Richard Gostich and his wife attended the Church.  Richard Gostich said that he had “grown up” in the Church and until recent months the Tepavcevic family and the Gostich family had been on good terms.  However, following an event early in 1996 he had not regularly attended the Church.  He went on this occasion to report his father’s ill-health to Mr Tepavcevic, who had not returned his earlier telephone call.  In the Church precinct he informed Mr Tepavcevic of his father’s predicament.

Mr Tepavcevic in his evidence confirmed having seen Richard Gostich and his wife at the Church that day, but denied that he was given any information about Mr Gostich.

• 25 July 1996—Mr Gostich did not attend work.  During the afternoon a meeting of the committee was summonsed.  According to the minutes, the meeting was held at 8.00 p.m. Prior to the meeting Mr Popovic had spoken with Mr Tepavcevic.  The latter said that he was unable to attend because of another engagement.  In their discussion Mr Tepavcevic enquired whether a medical certificate or any other communication had been received.  He was informed that this had not occurred, and he told Mr Popovic that he thought Mr Gostich should be dismissed.  He would go along with the committee decision.

The minutes of the meeting record the decision to dismiss Mr Gostich.  Matters noted in the minutes of the meeting include:

•          “No communication received from him while away”.
           •          “No medical certificate received”.
           •          “Not known when he would return”.
  ...
           •          “He left overseas with his wife - not possible to contact her”.
  ...

•“Nobody knew whther (sic) he would return and if so when he would come back.  We were fed up with his total lack of consideration and not telling us anything since he left the country.

•          “Nobody definitely knew when he left Australia”.

The evidence is clear that no attempt was made by the committee to contact either Mr Heard, who had been dealing with the respondent on Mr Gostich’s behalf, or Richard Gostich, or anyone at Mr Gostich’s home (where the committee knew his mother-in-law lived) to seek an explanation for Mr Gostich’s absence.  It is interesting that both Mr Tepavcevic and the minutes give emphasis to the fact that no medical certificate was received.  Both Mr Popovic and Mr Tepavcevic frankly acknowledged in evidence that they would not believe information emanating from Mr Gostich in any event.  They were quite sure that when he left to travel overseas he always intended to stay there for the seven weeks which he had initially requested, and that he intended to do so regardless of their direction that he was to return on 25 July 1996.  Mr Popovic stressed that the committee did not feel that it was their obligation to make enquiries.  It was up to Mr Gostich to let the committee know why he was not at work, if there were any good reason for his absence.

• 25 July 1996—Letter of termination (set out earlier in these reasons) posted to Mr Gostich’s home address.

• 17 August 1996—Mr Gostich returns to Australia with his family (after an absence of 5½ weeks).

• 19 August 1996—Mr Gostich consults Dr Ratneike, again complaining of chest pains and left arm pain.  She thought the symptoms were atypical of angina but referred Mr Gostich to a cardiologist.  The cardiologist in due course reported back to Dr Ratneike that there were no indications of heart disease.  The effect of Dr Ratneike’s evidence is that she considered the symptoms about which Mr Gostich complained from time to time were due to anxiety.

The respondent contends that Mr Gostich’s evidence of ill-health, and the complex pattern of attendances on doctors and communications with third parties are all part of an elaborate hoax planned from about 11 May 1996 when the application for seven weeks leave was first made to the employer.  Broad reference is made to the various allegations which were canvassed before the Judicial Registrar as evidence that Mr Gostich is not someone to be trusted.  Plainly there was much hostility between the parties and these allegations must be viewed against that background.  The evidence, including the correspondence passing between the parties, indicates that on many occasions the participants were being less than objective.  Anger and frustration on the part of Mr Gostich at times caused him to be aggressive and arrogant in his dealings with the committee (criticisms of him made by the Judicial Registrar).  In my view, however, the evidence shows that he was responding in like kind to his treatment at the hands of the committee, or at least to his perception of it.  However, even if there is a good reason to question the veracity of aspects of Mr Gostich’s evidence in relation to some of the other events canvassed before the Judicial Registrar, it does not follow that his evidence about ill-health must inevitably be rejected.

The respondent’s contention that it is clear that Mr Gostich always intended to take seven weeks leave fails to pay any regard to Mr Gostich’s letters of 10 June and 1 July 1996 to the respondent when he sought shorter periods of holiday, and offered explanations which would justify the periods that he sought.  It also fails to pay any regard to the actual return bookings which Mr Gostich held from time to time.  The respondent contends that the evidence of actual bookings made through Mr Ilic should be dismissed as merely part of the sham.  Similarly, the attendances upon the doctors, and their diagnoses, should be dismissed on the same ground.  The respondent argues that Mr Gostich had, through his earlier medical history, learned that he could attract the attention of the doctors by complaining of chest pain and pain in his left arm.  The respondent does not dispute the attendances upon the doctors, but denies the genuineness of the symptoms.

The respondent also relies heavily on evidence led on the review from Ms Salma Zanan who in mid-1996 was working as an administrative officer at the Migration Resource Centre, the premises from which Mr Gostich worked.  She gave evidence that in the early part of 1996 Mr Gostich said that he was proposing to travel overseas with his family for six weeks and in later conversation she learned that he was applying for six weeks leave.  Because of her knowledge of the terms of grants made to charities to employ grant-in-aid workers Ms Zanan thought that he would not have an entitlement of that length.  Later she understood from conversation around the office that he had applied for six weeks leave.  On an occasion, which she confidently thinks was in June 1996, Ms Zanan had a conversation with Mr Gostich about his holidays whilst he was operating a photostat machine.  She believed she may have said to him that she thought he was not entitled to six weeks holiday, and he said words to the effect “if they give me six weeks or not, I am going for six weeks”.  Mr Gostich told her that he had made his bookings.

During cross-examination, Ms Zanan, said that as the office administrator, she expected Mr Gostich to return after two weeks.  She waited a few days thereafter.  When he had not returned she telephoned the secretary of the respondent, Mrs Rakich to ascertain when Mr Gostich would return.  Mrs Rakich said she would find out from management, and check with the respondent’s committee as she understood that his leave was to be for two weeks.

It is plain from other evidence that Mrs Rakich was a central player in the steps taken to dismiss Mr Gostich on 25 July 1996 and that she knew that day that he had not returned.  Ms Zanan’s evidence about the conversation with Mrs Rakich is difficult to reconcile with the rest of the evidence.  Moreover, the fact that she had a belief that Mr Gostich was to be away for two weeks before she spoke to Mrs Rakich suggests that other staff members had been told that Mr Gostich would be away for two weeks.  In the absence of any other information about how that knowledge arose, the probability is that Mr Gostich was the source of the information that he would be away for two weeks.

I do not consider the evidence of Ms Zanan provides any material support to the respondent’s case.  In May 1996 Mr Gostich was anxious to obtain seven weeks (not six weeks) leave.  However, by 10 June 1996 he had altered that request.  He altered the request to a shorter period again on 1 July 1996, having in the meantime made a firm booking that would return him to Adelaide on the morning of 3 August 1996.

Richard Gostich gave evidence that at some stage, it would appear sometime in June, his father was saying that he would take four weeks leave whether he got permission or not.  However, it is also clear that Mr Gostich was very concerned to keep his job.  As the departure date approached, the evidence supports a finding that he gave up any thought of exceeding his leave - hence his instruction to Mr Ilic to make arrangements for him to be back by 25 July 1996.  The fact that the Migrant Resource Centre was under the belief in July that he had gone for two weeks also tends to bear this out.

The suggestion that from about May 1997 Mr Gostich devised and implemented the complex set of facts, which the evidence now establishes, as part of an elaborate scheme in my view defies belief.  I do not accept that suggestion as a reasonable possibility.

The respondent’s assertion that Mr Gostich was putting into effect an elaborate plan would require not only the finding that his evidence is false, but a similar finding in respect of the evidence of Mrs Gostich, and the rejection of significant parts of the evidence of Richard Gostich.  When this was put to counsel for the respondent, counsel, in my view properly, did not submit that the Court should find that either of these people had knowingly given false evidence. Their presentation in the witness box, and the support which Richard Gostich’s evidence received from Mr Ilic and Mr Heard, could not support such a submission.  The respondent’s case discloses no reason why the evidence of Mrs Gostich and Richard should not be accepted.  I consider their evidence provides strong support for important aspects of Mr Gostich’s evidence.  In my opinion the probabilities which arise from the complex inter-relationship of the various events chronicled above leads to the conclusion that when Mr Gostich left Australia on 9 July 1996 he did intend to return to work on 25 July 1996.  However, by reason of symptoms of ill-health genuinely suffered by him, he was advised not to travel on the flight that would have enabled him to return to work on that day.  His absence from work, had he not been dismissed, would have been temporary.

The ill-health which causes a temporary absence for the purpose of s 170DF(1)(a) need not be an illness or injury that arises out of or in the course of the employee’s employment.  There is no requirement that the ill-health suffered in Yugoslavia be work related.  The evidence paints a picture of Mr Gostich being under great stress by reason of events which happened in the Church community and in the course of his employment leading up to the time when he departed on holiday.  He departed knowing that he would be dismissed if he were not back at the job on 25 July 1996.  He desired to retain his job, but left not having a guaranteed plane booking to be home in time.  I do not find it improbable that in Europe he suffered bouts of anxiety and the onset of the pattern of anxiety symptoms which he had experienced in the past. 

I have reached the above conclusion without reference to the evidence of Mr Tepavcevic.  I am conscious of the desirability of not aggravating tensions and hostilities that exist within the community in which the parties to these proceedings live, but I think it is necessary to express findings in relation to the evidence of Mr Tepavcevic.  I found him an unconvincing witness whose evidence I do not accept.  Whilst he was at pains to deny that he knew Mr Gostich was suffering ill-health in early July 1996 before he left Australia, the denial made on the review is inconsistent with an answer he gave in cross-examination before the Judicial Registrar when he said that Mr Gostich was complaining that he was sick before he went on holiday.  His denial is also inconsistent with the evidence of Mrs Gostich.  On the differing versions of the conversation which occurred at church on 7 July 1996 the probabilities are in favour of the version given by Mr and Mrs Gostich.  Further, in his cross-examination on the review, Mr Tepavcevic said that neither he nor “the community” had any knowledge of ill-health on the part of Mr Gostich in the months, even years, before he went on holidays.  This assertion is inconsistent with the complaint by the committee, of which he was vice president, that Mr Gostich had exceeded his entitlement to sick leave.

Mr Tepavcevic acknowledged that Richard Gostich and his wife were at Church on 21 July 1996.  The fact that they were, unusually, at Church that day, suggests there must have been some particular reason for them attending.  I do not doubt the evidence of Mr Richard Gostich that the reason for his attendance was to pass on advice about his father’s ill-health.  I do not believe Mr Tepavcevic’s denial that he was given this information on 21 July 1996.

I find that Mr Gostich was temporarily absent from his employment on 25 July 1996 because of illness.  That was the main, if not the only reason why he was summarily dismissed.  The dismissal was in contravention of s 170DF(1)(a), and it follows that there was no valid reason for the dismissal.

The parties agreed that the remuneration of Mr Gostich in the six months immediately preceding his dismissal was $8,900 gross, and in the absence of any evidence to suggest otherwise the Court is asked to infer that he would have received this sum in the following six months had his employment not been summarily terminated: see s 170EE(3).  It was also agreed that whatever moneys Mr Gostich had earned since his dismissal in other employment, he would have earned in any event.  I consider that the evidence justifies an award of compensation to Mr Gostich of $8,900.  The evidence does not establish, as a matter of probability, that had he not been dismissed on 25 July 1996 his employment would have been lawfully terminated on some other ground within six months of that date.

This is not an appropriate case to order reinstatement, and I do not understand counsel for Mr Gostich to advance this as a serious alternative.  The parties were at loggerheads for some months before the termination of the employment, and have accused each other of numerous frauds and acts of deceit ever since.  It would be impossible to reinstate any workable relationship of employer and employee, quite apart from difficulties that might arise in respect of funding through the grant-in-aid scheme.

An award of $8,900 is the maximum compensation that can be awarded under s 170EE(3).  Notwithstanding that fact, I consider it is appropriate to include in the judgment an additional allowance for interest:  see Simpson v Systems Services Pty Ltd (No.2) (1997) 73 IR 61. In that case I included interest at a rate of 10.5 per cent, after having referred to a practice rule issued in the Supreme Court of New South Wales in respect of interest under s 94 of the Supreme Court Act 1970 (NSW). I referred to that rule, as it is one of the few published guides to the rate of interest which should be allowed in the assessment of prejudgment interest. However I note that in Zabel v Australian Submarine Corporation, (unreported, Industrial Relations Court of Australia, 21 November 1997) Judicial Registrar L Farrell in this State recently awarded interest at a lower rate based on interest rates prescribed in the Third Schedule to the South Australian Supreme Court Rules. Counsel for Mr Gostich did not argue against the use of the Third Schedule Rates. By reference to the Third Schedule an average rate of 8 per cent in this case would seem appropriate. In calculating interest it is necessary to reflect the fact that the compensation is to make good lost remuneration that would have been earned week by week over the six months following 25 July 1996. It is therefore appropriate to allow interest at half rates over the first six months from 25 July 1996 and thereafter at the full rate of eight per cent. On this basis I allow interest in the sum of $826.00 for the period from 25 July 1996 to 22 December 1997.

The orders of the Court will be:

1. Set aside the decision of the Judicial Registrar made on 23 May 1997.

2. Enter judgment for the applicant, Michael Gostich, against the respondent, the Serbian community of South Australia Inc. in the sum of $9,726 00.

I certify that this and the preceding twenty-two (2) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice von Doussa

Associate:

Dated:            22 December 1997

Counsel for the Applicant:	Mr T L Stanley
Solicitor for the Applicant:	Ms S J Lorenz
Counsel for the Respondent:	Mr F Di Fazio
Solicitor for the Respondent:	Wakefields
Date of Hearing:	10 and 11 December 1997
Date of Judgment:	22 December 1997