Marianne Troop v Spastic Centre of New South Wales
[1996] IRCA 40
•16 February 1996
DECISION NO: 40/96
Industrial Relations Court of Australia
New South Wales District Registry Matter No.: NI 95/1519
Between: Marianne TROOP
Applicant
AND: Spastic Centre of New South Wales
Respondent
Place: Sydney
Date: 18 September, 17 November 1995
Before: Tomlinson JR
Reasons for decision
By application dated the 23 March 1995 the applicant Marianne Troop sought reinstatement and compensation. At the commencement of the hearing of this matter the applicant indicated she was not seeking re-instatement, but compensation. In her evidence in chief the applicant stated she began in 1993 as a bookkeeper for Data Entry Base Services (“DEBS”), a division of the Spastic Centre of New South Wales whose head office is situated at 189 Allambie Road Allambie. In the course of her employment with the respondent the applicant was responsible for some 14 staff members. The applicant and one other person, Lisa were the only able-bodied members of staff.
The applicant told the court she had answered an advertisement for a manager/bookkeeper and attended an interview with Mr Bob White, an executive with the respondent Spastic Centre. By way of explanation the applicant stated that DEBS is a business unit, having been set up with funding from the Commonwealth Government, and that the applicant in her capacity as an employee of DEBS reported to the Spastic Centre at Allambie Heights. In order to earn revenue and to gainfully employ incapacitated people the DEBS business unit contracted out it’s book-keeping and office services on a commercial basis.
At the time of her commencement the revenue of DEBS was $500.00 per month and that when the applicant left the employment on 23 March 1995 the revenue of DEBS was some $81,000.00 a year, DEBS supplying bookkeeping and data-entry services to individual clients.
The applicant admitted an association with Mr Beauchamp, a person who was variously associated with companies known as “Packaging Plus”, “First Aid Plus” and “Sydney Mobile”. From the evidence presented to the court it became clear that the Spastic Centre and DEBS the employer of the applicant had no knowledge of the existence of the companies of Mr Beauchamp nor of any involvement with me until early March 1995.
In her evidence in chief the applicant stated that in the course of her employment she arranged to rent a post office box at Manly, the purpose of which was to receive money for work performed by DEBS. The applicant stated Mr Rob White, the Senior Manager of DEBSagreed to this course of action in April 1994. This statement was denied by Mr White, who later gave evidence to the court on behalf of the respondent. The applicant was shown exhibit 1, an invoice dated 7 March 1995 as indicative of the type of invoice raised by DEBS for services provided to its various clients. The invoice gave Post Office box 184 Brookvale 2100 as its postal address.
The applicant stated that at DEBS there were two telephone lines, a fax line and another telephone line which, according to the applicant, began to be used for clients of DEBS. It appears this telephone line was also used for promotional purposes of the DEBS services. According to the evidence of the applicant several clients “swapped over to using that line”, for their own business purposes. The court heard evidence that the various clients of DEBS were invoiced for the use of these communication facilities. Apart from the sworn testimony of the applicant no further proof was provided as to this evidence.
Before termination the applicant stated no-one had ever criticised her work.
The applicant stated that on 16 March 1995 she was requested to attend a meeting in the presence of Mr Rob White, Mr Peter Marino the supervisor to whom the applicant reported. Present also was a Ms Brown who took notes. The applicant stated that Rob White did most of the talking and indicated that a problem had arisen concerning three particular invoices. The particular invoices had DEBS’ post office box and telephone number printed on them and related to a company known as “Pacific Mobile” that had seemingly raised the accounts in order that the Australian Red Cross be noted as debtor.
The applicant explained that the invoices concerned were from Packaging Plus and further indicated that she “knew about the invoices” and stated further that “they were for work that had been performed by Packaging Plus for Red Cross”.
The applicant stated she had allowed “Packaging Plus” to use the DEBS post office box and phone number. The evidence of the applicant at this stage was confusing. The applicant however acknowledged that Mr Rob White questioned as to whether the applicant perceived a conflict of interest that she may find herself in regarding her employment with DEBS and her involvement with the company named Sydney Mobile.
The applicant advised the court that she knew that Sydney Mobile was under investigation by the police. Further the applicant repeated that she allowed Mr Gary Beauchamp in form of one of his companies to use the postal and facsimile address of her employer, the Spastic Centre of New South Wales. The applicant stated that she not aware of the requirement to obtain the permission of her employer the Spastic Centre for her friend Mr Beauchamp to use the property of her employer.
The applicant was advised that Mr Bruce Alcorn the Chief Executive Officer of the respondent indicated that a Mr Phillip Hart from Red Cross had alerted the Spastic Centre to the incorrect invoices of Packaging Plus.
The applicant told the court that a further meeting on 20 March 1995 held at the Spastic Centre she was told by Mr Phil Ryan that he was not happy with her explanation concerning the three invoices. The court learned that the applicant stated to the meeting that she was not prepared to resign.
The applicant stated a letter was subsequently received by her instructing solicitor, stating:-
“20 March 1995
Dear Mr Edmunds
re M.Troop
Further to our phone conversation this letter confirms The Centre’s decision to summarily dismiss Ms M Troop effective 20 March 1995.”
Ms Troop has been paid to the end of March and therefore The Centre will be paying one months pay in lieu of notice less the portion already paid for March.
Yours faithfully
(SGD) P J Ryan
Personnel Manager.”
In cross examination the applicant stated she was now the de-facto partner of Gary Beauchamp, that she had been a volunteer with Red Cross before joining the Spastic Centre. As such the applicant gave first aid training for which she was paid.
The applicant told the court she was a signatory to a bank account held at the Commonwealth Bank at St.Leonard’s entitled “Sydney Mobile.”
By subpoena filed 7 September 1995 the respondent sought in schedule three of the subpoena all records notes or documents detailing the academic or professional qualifications held by the applicant in the period 11 November 1993 to 20 March 1995, including inter alia a copy of personal resume, curriculum vitae or the profile provided by the applicant to the respondent immediately prior to her appointment. The respondent also sought testamurs certificates and receipts for payment of professional society or association membership fees.
The applicant stated that she was not able to produce those documents, particularly the one she would have provided to the Spastic Centre as she had lost all documents referred to. The applicant was shown her application for employment signed by her on 11 November 1993 marked as Exhibit “A” in these proceedings. Page three of that application indicated columns full of provision of information concerning employment history and details of previous employers. Written in ink across that document in the space indicated were the words “as per resume.”
The applicant stated under cross examination that could provide no information as to why the Spastic Centre did not have a copy of any “documents” referred to in Exhibit A.
The applicant said she previously had been a company secretary/accountant and that she was studying accountancy but she lacked formal qualifications. The applicant stated she had performed the duties of an accountant in previous jobs. The applicant denied that she held out that she had a Bachelor of Business or that she was a Certified Practising Accountant. The applicant was asked whether she held out to the Miss Australia Contest that she was a Certified Practicing Accountant. The applicant was shown exhibit C in these proceedings being a document produced by DEBS in the form of a bound folder being a proposal to supply bookkeeping services and company secretarial function for Miss Australia Awards. Page nine of that document lists key staff and the first heading notes that the applicant, Marianne Troop held the qualification of a Bachelor of Business, CPA ASIA. The applicant stated that she had not prepared that document but she indeed gave a presentation and allowed that document to be distributed to members of the public. The applicant stated that not she but the office of Mr Rob White had prepared the proposal document for the Miss Australia Award and that at the time she saw exhibit C she discussed her alleged qualifications with Mr White. It was the evidence of the applicant that at that time in relation to the incorrect qualifications Mr White, the CEO of the Spastic Centre, and said that the matter was “irrelevant”. Evidence was presented to the court that the promotional material including the incorrect qualifications of the applicant had also been provided to the RAAF in order to attract revenue to the Spastic Centre. The question was put to the applicant:
“At (that) same time you were holding out to two clients (of the Spastic Centre) that you were a qualified accountant?”
In response the applicant replied:
“I have to say no.”
The applicant confirmed that she had at the time of the Miss Australia Awards presentation engaged in conversation with Mr Jon Stein from Queensland Spastic Centre and indicated she was capable of fulfilling a company secretarial position and that she was familiar with the kinds of responsibilities that would be involved. The applicant confirmed that prior to accepting the position with DEBS she had been the accountant/company secretary with “Hanna Match”
The applicant stated she was involved with Sydney Mobile volunteer unit and that members of the group included herself and Mr Gary Beauchamp. The applicant said that she was a member of Sydney Mobile while she was employed by the Spastic Centre. In cross examination the applicant confirmed she was on the Executive Committee of a Divisional Council of the Red Cross, however denied that she held that position simultaneously while she worked for the Spastic Centre. The applicant stated that she ceased to be a member of the Divisional Council in June of 1995.
The applicant agreed under cross examination that she and Mr Beauchamp were signatories to Sydney Mobile Volunteer Council.
The applicant agreed in cross examination that three various invoices addressed to the Sydney Mobile Volunteer Detachment Unit from First Aid Plus had imprinted upon them the postal and facsimile details of the Spastic Centre and that it was specifically these three invoices that formed the basis of the meetings between herself and the respondent held on 16 and 20 March 1995. Under considerable questioning the applicant agreed that she allowed the postal addresses, telephone and facsimile numbers, the property of the respondent, to be used for foreign orders in the form of the companies of Mr Beauchamp.
In cross examination the applicant agreed that at the meeting at Allambie on 20 March 1995 “someone” on behalf of the respondent had said words to the effect
“The Centre has lost confidence in you”.
The court heard that the solicitor of the applicant Mr Don Edmunds was present at the meeting on 20 March 1995 but stated he was there only as a friend and not in a professional capacity. The court did not hear from Mr Edmunds.
The applicant admitted to keeping the blank letterhead of organisations pertaining to Mr Beauchamp in her desk at DEBS. The applicant stated Mr Rob White was aware of the personal relationship between herself and her partner Mr Beauchamp but that Mr Peter Marino would not have known the details of her personal relationship with Mr Beauchamp.
In giving her evidence the applicant stated:
“All I did was as manager (of DEBS) was to use a post office box number, a telephone number and a fax number and an answering machine.”
In cross examination the applicant agreed that it was a financial gain for Mr Beauchamp to able to use the DEBS business facilities. The applicant stated she had no financial link with Packaging Plus and in cross examination stated that it was Mr Beauchamp who supplied the answering machine, used by DEBS.
On behalf of the respondent the court heard evidence from Mr Bruce Alcorn who stated he received a telephone call on 9 March 1995 from Phil Hart of the Australian Red Cross Society inquiring about an organisation named Packaging Plus and advising that the Red Cross was carrying out an investigation.
Mr Alcorn immediately after that telephone conversation spoke to Mr Rob White and Mr Peter Marino. The respondent at that point in time noted that 2 of the 3 invoices pre-dated the services of the applicant Marianne Troop. In cross examination Mr Alcorn confirmed that DEBS had supplied tender documents to the RAAF base at Richmond in order to attract work. Mr Alcorn also stated he was not aware of a Post Office box number or a facsimile service offered by DEBS to its clients.
Mr Alcorn said he concurred with the decision to terminate the applicant and that he would have discussed that decision with the personnel manager Mr Phil Ryan. Mr Alcorn stated that at all times DEBS had met its targeted financial requirements and was continuing to do so.
On behalf of the respondent the court heard from Mr Rob White who denied he was aware that permission had been granted to the applicant to open a Post Office box on behalf of DEBS. Mr White denied he was aware of the nature of the personal association of the applicant with Gary Beauchamp but there was no evidence that Mr White had any knowledge or information concerning business activities of the applicant and Mr Beauchamp.
On behalf of the respondent the court heard from Mr Phil Ryan, the personnel manager of the respondent and from Mr Peter Marino the direct supervisor of the applicant, to whom she reported. The two witness provided evidence of the meetings held between the applicant and the respondent on 16 and 20 March 1995 and of the opportunities afforded to the applicant to provide explanations as to the three invoices of an organisation in no way associated with DEBS or the Spastic Centre.
On behalf of the respondent the court heard from Ms Brown and Ms Picolo and it is a finding of this court that little weight can be accorded to the evidence of these people as they were not involved in the termination of the applicant.
On behalf of the applicant Mr Moore of counsel has advised there are no proceedings pending against the Applicant in any other place of a criminal nature arising from this or any other incident.
CONCLUSION
On behalf of the applicant Mr Moore of Counsel in written submission stated that in relation to the alleged conflict that was seemingly asserted on 16 March, 1995, the following could be stated:
That in a volunteer capacity within Red Cross the applicant was a signatory to a banking account of Sydney Mobile. In evidence, the applicant indicated that Sydney Mobile had two accounts; one in the City and one at St Leonards,
that she had a personal relationship with Mr Beauchamp,
that Mr Beauchamp had a business relationship with Sydney Mobile through an entity called Packaging Plus (or Fist Aid Plus),
that Mr Beauchamp supplied certain good under that business relationship to Sydney Mobile,
that Sydney Mobile made payments for the goods from its accounts,
that Mr Beauchamp had contacted the applicant about the need to issue statements to Sydney Mobile and asked whether he could identify the post box, telephone and facsimile of DEBS,
that the Applicant gave permission to identify these on the documents to be sent to Sydney Mobile,
that she should not have done this because of her position in DEBS and her involvement in Sydney Mobile,
and that in doing so she breached her contract of good faith and fidelity.
I agree with the submission of the respondent in reply to the above summary that it does not accurately summarise all the facts before the Court as above as the court did not hear from Mr Beauchamp as to the degree of his involvement in the matter of the creation of the invoices which at the very least fall into the category of misleading.
It is clear that on 20 March 1995 Messrs White, Marino and Ryan interviewed the applicant for a second time as a consequence of the interview held on 16 March 1995 as to serious concerns unexplained by the answers provided by the applicant. On 20 March 1995 applicant attended the meeting also with her solicitor Mr Don Edmunds - the same solicitor instructing Counsel for the applicant in this matter. Mr Marino gave evidence that he informed the applicant and Mr Edmunds that the real issues were that the applicant had no authority to allow another person to use the DEBS post office box, telephone numbers and fax numbers, and that the applicant had had some involvement with the organisation of the invoices in question. Subsequent to that interview the respondent wrote to Mr Edmunds terminating the employment of his client the applicant. It is clear that the respondent afforded the applicant every opportunity to defend herself against the allegations and that s. 170 DC of the Act has been complied with. Wilcox CJ in Gibson v Bosmac (1995) 130 ALR 245 at 252 states concerning s170 DC
“..It is intended to be applied in a practical, common sense way so as to ensure that the affected employee is treated fairly. Where the employee is aware of the precise nature of the employer’s concern full opportunity to respond to this concern and this is enough to satisfy the of the section.”
It is a finding of this court that the applicant has failed to prove that her employment was terminated in breach of subsection 170 DE(2) of the Act and further it is a finding that the respondent properly observed the principles of procedural fairness. I do not place weight on what might or might not have been discussed between Mr Alcorn and Mr Hart concerning the invoices prior to the meeting of 16 March 1995 in relation to the responsibilities of the respondent regarding procedural fairness as all concerns of the respondent were put squarely to the applicant on two separate occasions.
On behalf of the respondent it was submitted that there was no information or sufficient explanation to convince the respondent that the applicant had not engaged in serious misconduct. It was clear on the evidence present to the court that the invoices concerned had been created after the date on them illustrated because the telephone and facsimile numbers did not exist as at the dates so illustrated. The reason for this was never made apparent to the court.
It is a finding of this court that no firm decision was made to terminate the applicant’s employment prior to or during the second meeting held on 20 March 1995 in light of the oral evidence of the applicant that
“yes, well....until I got this ...letter of 20 March I guess I was still employed”.
It was the evidence of both parties that with the letter of termination the respondent decided to pay to the applicant one month’s pay. I place no weight on that payment as to the categorising of the conduct of the applicant and to my mind that payment falls into the category of being “ex gratia”.
During the course of the hearing the applicant stressed she had difficulty obtaining the return of certain items of her property after the contract of employment ceased. That difficulty was not demonstrated. The evidence of the applicant differed in that in examination in chief the court heard the answering machine in question was her property and then in cross examination the applicant stated the answering machine was the property of Mr Beauchamp. It is apparent the answering machine was supplied for the use of Mr Beauchamp and the court heard no evidence of other DEBS clients having access to this machine for their business purposes. No evidence was placed before the court as to why Mr Beauchamp found it necessary to arrange to use the address facilities of DEBS nor why he was unable to make other arrangements in order to conduct his business affairs. It can be concluded that the applicant brought the answering machine to the place of her employment in order to further Mr Beauchamp’s interests. No reliable hard evidence was brought forward as to the financial remuneration proffered by Mr Beauchamp to either DEBS or to the Spastic Centre for the use of the facilities of the respondent made available to him by the applicant.
The main theme underlying this application for relief under the Industrial Relations Act is what category did the conduct of the applicant fall when she allowed Packaging Plus to use the post office box rented and paid for by her employer on behalf of DEBS, the Spastic Centre of New South Wales.
The applicant stated on many occasions was that all she did was to allow Gary Beauchamp to use the facilities of the respondent. I agree with the submission of the respondent that the applicant was evasive in the manner in which she gave her evidence. I found the applicant to dissemble when asked a direct question and also to prevaricate. An example of that occurred when the applicant was faced with the reality of having to recall her conduct in presenting a document to potential clients of the respondent that she knew contained false and misleading information. That information related to the professional qualifications allegedly possessed by the applicant. From the evidence before the court it is clear that the applicant did nothing to prevent the false information being published to potential clients and I place no weight on her evidence that the matter was discussed with Mr White prior to its publication. In that regard I prefer the evidence of Mr White that the matter of the false credentials of the applicant was never brought to his attention prior to the Miss Australia presentation. In a different scenario such conduct on behalf of an employee would have resulted in severe sanctions and it is my view the applicant, having regard to her stated previous commercial experience, would have been well aware of that result. There was also evidence that at that time the applicant discussed with a prospective client her projected involvement in the business affairs of that client as its company secretary in that she would be involved with the filling of annual returns and corporate record keeping, allegedly her area of expertise.
The applicant in cross examination stated she was not aware she should have obtained permission from her employer for her partner to use its facilities. Put quite simply I do not believe her. Putting aside the moral implications of the applicant being an able-bodied person working for a charitable organisation devoted to the care of physically handicapped people it is a finding of this court that the applicant knowingly and deliberately indulged consistently in a course of conduct wherein she preferred the interests of herself and others to the detriment of her employer. The applicant placed herself in a position of conflict of interest resulting directly from her personal involvement in the activities of Sydney Mobile and indirectly from her relationship with Mr Beauchamp. I agree with the submission of the respondent that at the very least the applicant should have fully disclosed this conflict to the respondent. The breach of loyalty on the part of the applicant is clear.
It is a primary duty of any contract of employment that an employee owes loyalty and fealty to the employer. That duty is well demonstrated in case law and has been outlined by Dixon and McTiernan JJ in Blythe Chemicals v Bushnell (1939) 49 CLR 56.
It is the view of this court that in allowing third parties access to her employer’s property in the manner in which she did the applicant breached her primary duty of loyalty and fealty. In addition to that the court heard no evidence that at any stage she sought permission for her partner to use her employer’s facilities. Whether or not the applicant or any of her associates received any benefit either financial or of any other kind is irrelevant -that duty is owed - and in this case that duty is for the applicant as manager of DEBS to see that the equipment and facilities of the respondent are solely used by and for the clients of the respondent. It is a finding of this court that it is immaterial that no actual financial loss to the respondent was demonstrated. The respondent, although partly dependent upon charity, operated DEBS as a source of revenue. The applicant stated that in her evidence.
On behalf of the applicant it was submitted when atempting to categorize the conduct of the applicant that a mere suspicion of misconduct will not suffice and to that end the authority of Blythe Chemicals v Bushnell (supra) was relied upon where it is stated:
“Conduct which in respect of important matters is incompatible with the fulfilment of an employee’s duty, or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee, is a ground for dismissal...But the conduct of the employee must itself involve the incompatibility, conflict or impediment, or be destructive of confidence. An actual repugnance between his acts and his relationship must be found”.
It is a finding of this court that an actual repugnance was found in the that the applicant both indulged in the conduct illustrated and that she deliberately concealed such activity from her employer. Further, it is a finding of this court that the conduct of the applicant falls into the category of serious misconduct on the basis that S170 DB(1) of the Act defines serious misconduct to be:
“misconduct of a kind such that it would be unreasonable to require the employer to continue the employment during the notice period.”
and in that regard it was proper the respondent required the applicant to hand in her keys to her place of work in the manner in which it did. The applicant was engaged as the manager of DEBS and her duties responsibilities and seniority placed her in the position of sufficient trust so that she was had a primary fiduciary duty to her employer the respondent. It si a finding of this court that the respondent the Spastic Centre of New South Wales had a valid reason to terminate the employment of the applicant Marianne Troop.
I agree with the submission of the respondent that the conduct of the applicant can be categorised as serious misconduct on the basis of North v Television Corporation 11 ALR 599 where it was stated that misconduct is:
“conduct so seriously in breach of the contract that standards of fairness and justice the employer should not be bound to continue the employee.”
Accordingly I order the application of Marianne Troop be dismissed.
It is appropriate the question of costs be addressed and both parties were requested to consider the matter. This court is empowered under Section 347 of the Act to order costs against an applicant where proceedings are instituted vexatiously . On behalf of the applicant it was submitted that one could not say with certainty the proceedings were doomed to failure.
I do not agree with that submission and from the information as the employment history of the applicant I am of the view that the applicant would have been aware from the outset that she had no substantial prospect of success. Accordingly I secondly order the applicant to pay the costs of the respondent in defending these proceedings such costs to assessed in accordance with the Federal Court scale.
MINUTES OF ORDER
That the application of Marianne Troop be dismissed.
That the applicant Marianne Troop pay the costs of the respondent in defending this application such costs to be assessed in accordance with the Federal Court scale.
I certify that the preceding thirteen (13) pages are a true and correct copy of the Reasons for Decision of Judicial Registrar Tomlinson.
Associate:
Date: 16 February 1996
APPEARANCES
Applicant
Solicitor Mr D Gardner
of Messrs Cutler Hughes Harris
Respondent
Counsel Mr R Moore
Instructed by Messrs Donald Edmunds & Farmer
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