Mario Bartucciotto v Euro Printing Co Pty Ltd
[1995] IRCA 365
•20 Jul 1995
C A T C H W O R D S
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - claim of UNLAWFUL TERMINATION - whether termination for a VALID REASON - whether SERIOUS MISCONDUCT - whether PROCEDURAL FAIRNESS - REMEDY
INDUSTRIAL RELATIONS ACT 1988 Ss 170EA, 170DB(2), 170DC, 170DE, 170EE
Nicolson v Heaven & Earth Gallery Pty Ltd (1994) 126 ALR 233
MARIO BARTUCCIOTTO v EURO PRINTING CO PTY LTD - WI 95/1177
BEFORE: BOON JR
PLACE: PERTH
DATE: 20 JULY 1995
IN THE INDUSTRIAL RELATIONS )
COURT OF AUSTRALIA )
WESTERN AUSTRALIA )
DISTRICT REGISTRY ) No. WI 95/1177
BETWEEN: MARIO BARTUCCIOTTO
- Applicant
AND: EURO PRINTING CO PTY LTD
- Respondent
MINUTE OF ORDERS
BEFORE: BOON JR
PLACE: PERTH
DATE: 20 JULY 1995
THE COURT ORDERS THAT:
The Respondent pay to the Applicant compensation in the sum of $1,850 within 21 days of the date of this order.
NOTE: Settlement and entry of Orders dealt with by Order 36 of the Industrial Relations Court Rules
IN THE INDUSTRIAL RELATIONS )
COURT OF AUSTRALIA )
WESTERN AUSTRALIA )
DISTRICT REGISTRY ) No. WI 95/1177
BETWEEN: MARIO BARTUCCIOTTO
- Applicant
AND: EURO PRINTING CO PTY LTD
- Respondent
BEFORE: BOON JR
PLACE: PERTH
DATE: 20 JULY 1995
REASONS FOR JUDGMENT
This is an application under Section 170EA of the Industrial Relations Act 1988 for payment of compensation by the Respondent to the Applicant for the alleged unlawful termination of the Applicant’s employment on 1 August 1994.
The Applicant alleges that the termination of his employment breached the Industrial Relations Act in a number of ways. In the first place, it is said that no notice was given as required by the provisions of Section 170DB. The Respondent admits that no notice was given of the termination but says that it was not required to give notice as the Applicant was guilty of serious misconduct within the meaning of subsection (2) of Section 170DB.
Secondly, the Applicant says that he was not given an opportunity to respond to allegations made against him before his employment was terminated within the meaning of Section 170DC. The Respondent states that the Applicant was accorded procedural fairness.
Thirdly, the Applicant states that there was no valid reason for his termination within the meaning of Section 170DE. The Respondent states that there was a valid reason for the termination connected with the employee’s conduct in that the Applicant was guilty of serious misconduct such as would justify summary dismissal at common law. Further, the Respondent says that the Applicant was employed specifically as a sales representative and as such he had to exercise reasonable care and skill. The applicant failed to do so and the gravity of the consequences meant that there was a valid reason for the termination.
Fourthly, the Applicant states that even if it is found that there might be a valid reason for the termination connected with his conduct within the meaning of subsection (1) of Section 170DE, the reason is not valid as the termination was harsh, unjust or unreasonable within the meaning of subsection (2) of Section 170DE. The Respondent says that as the Applicant was guilty of serious misconduct, the termination was not harsh, unjust or unreasonable.
BACKGROUND
The Respondent, Euro Printing Co Pty Ltd, carries on a printing business. It is a medium sized business with 32 employees, including five sales representatives. Mr Angelo Manni is the Managing Director of the Respondent. Before Mr Manni set up Euro Printing, he and the Applicant, Mr Mario Bartucciotto, worked together at another printing business, Universal Printing Company, for about seven years.
On 7 July 1989, some time after Mr Manni had set up Euro Printing, Mr Bartucciotto started work as a sales representative with the Respondent. There was no written contract of employment. As a sales representative, Mr Bartucciotto was responsible for obtaining orders from the public for printing. He also did what he could to promote and market the Respondent’s business. At the time of the termination of his employment on 1 August 1994, he was 48 years old.
Euro Printing had a number of regular clients on its books. One of these regular clients was Tony Barlow Menswear, which operates a chain of men’s clothing stores. Tony Barlow has a number of divisions including Tony Barlow Formal Hire and Shearers. Mr Michael Vidot is the national manager of Tony Barlow Formal Hire. He had placed orders for the printing of docket books for Tony Barlow Formal Hire and Shearers with Euro Printing for some years. Mr Vidot gave evidence that he had been dealing with Mr Bartucciotto for years and the two men had become friends. Mr Vidot himself would usually place orders with Euro Printing and nine times out of ten he would deal with Mario Bartucciotto. He said that because they had become friends they had dispensed with formalities and most orders were placed verbally, either in person or over the telephone. Euro Printing held plates of the different types of docket books regularly required by Tony Barlow on its record books and it was only when Tony Barlow required something different which needed confirmation that Euro Printing would fax a copy to Mr Vidot for confirmation and approval.
The Respondent’s Summary of Facts filed in this matter states at paragraph 7
“The procedure used in the Respondent’s business was as follows:
7.1 The sales representative would write the information supplied by the client in a quotation pad.
7.2 The quote would be given to an estimator.
7.3 The estimator would calculate the cost and return the cost price to the sales representative.
7.4 The sales representative would then write the cost on a fax sheet and fax it to the client.
7.5 The client would then confirm the order by phone, fax or letter.
7.6 The sales representative would then write the job card and give it to the Print Department.”
The Applicant’s Summary of Facts states at paragraphs 5-8 as follows:
“5.0 The Applicant was never informed of a procedure to be followed other than completing a “job card” and providing it to the Respondent’s Print Department.
6.0 Sales representatives were not allowed to enter the room where the Print Department and Art Department were located.
7.0 The Applicant’s practice was to write orders on a pad and then complete a job card when he returned to the Respondent’s offices.
8.0 As a sales representative the Applicant usually had no involvement with the printing or delivery of orders. Orders are not usually checked by the sales representatives prior to delivery.”
Mr Bartucciotto’s evidence was that for new clients and some regular clients the orders were always faxed or given to the client in writing. For some regular clients, including Tony Barlow, their orders were taken verbally.
Although the Respondent’s position is that the standard procedure which it expected its sales representatives to follow was to provide confirmation to its clients in writing, it is clear from Mr Manni’s evidence that he knew that often orders were taken verbally. Mr Manni’s evidence in cross examination was that it was not standard procedure for clients making small orders to always give confirmation in writing, but he said that for large orders they should provide written confirmation.
On 16 June 1994, Mr Bartucciotto went to Tony Barlow’s premises at Mr Vidot’s request. According to Mr Bartucciotto, he went in, sat down and engaged in some social conversation. He said that Mr Vidot then ordered 5,000 books of dockets for Tony Barlow Formal Hire, and 2,000 books of dockets for Shearers. He said that he wrote down the order and repeated to Mr Vidot “5,000 x 50, 2,000 x 50”. Mr Bartucciotto said that he went back to his office, talked to the printer and worked out a price of $7.10 per book, which is about a dollar less per book than usual. He said that he then rang Mr Vidot and said “$7.10 per book, multiplied by 5,000”. Mr Vidot replied “That’s a lot of money” and asked Mr Bartucciotto to give him the best price he could. Mr Bartucciotto acknowledged that this order was not normal for Tony Barlow. According to Mr Bartucciotto, Mr Vidot had said that he had a big job for him. There was no written confirmation of the order. The total price of the job was to be $49,700, but Mr Bartucciotto acknowledged that the total price was not stated to Mr Vidot. He had only quoted the price of $7.10 per book.
According to Mr Bartucciotto, Tony Barlow normally ordered by the number of books required as opposed to the number of leaflets. Each docket book printed for Tony Barlow contained fifty sleeves. Each sleeve is made up of a leaflet containing one original docket and five duplicates. Two previous invoices provided by Euro Printing to Tony Barlow read “100 x 50 hire books - Adelaide” and “100 x 50 Shearers Formal Hire books” respectively. These invoices are by no means conclusive. It is possible that Mr Vidot placed the orders with Mr Bartucciotto according to the number of sleeves or dockets required rather than the total number of books.
According to Mr Vidot, he usually ordered in sleeves or leaflets to avoid confusion. On previous occasions, Tony Barlow had ordered by the number of books and this had caused confusion as some docket books had contained fifty leaflets and some had contained forty leaflets. Mr Vidot’s evidence was that when he placed the order with Mr Bartucciotto on 14 or 15 June, he asked for 5,000 leaflets for Tony Barlow Formal Hire and 2,000 leaflets for Shearers. This would amount to 100 docket books for Tony Barlow Formal Hire and forty docket books for Shearers. He said that there was no way that he would order 5,000 books, as Tony Barlow watches its cash flow carefully. If he had ordered 5,000 books, they would have had a large quantity of books sitting on the shelves for a very long time. His usual order of 100 books lasted eight or nine months
Euro Printing ordered paper upon receipt of the order and it took about a week to print the docket books. The misunderstanding or mistake was not revealed until the docket books were delivered to Tony Barlow. One of the directors of Tony Barlow had seen the docket books arrive and had reported to Mr Vidot that there were “millions” of them. Mr Vidot didn’t see the invoices for a few days. When they arrived on his desk he telephoned Mr Bartucciotto and told him that he hadn’t ordered so many books. Mr Bartucciotto told Mr Vidot that he would check on it. Mr Vidot spoke to Mr Manni a day or so later and confirmed that he hadn’t ordered so many books. Mr Vidot told Mr Manni that he had only ordered 100 books for Tony Barlow Formal Hire, but said that as a favour he would take 500 books. Mr Vidot said that the 500 books would last Tony Barlow a long time, but that when they ran out Tony Barlow would order further books from those which had already been printed by Euro Printing.
Mr Bartucciotto remains adamant that Mr Vidot did order 5,000 and 2,000 books respectively. Mr Vidot remains adamant that he ordered 5,000 and 2,000 sleeves. It is clear that there was a misunderstanding about the order. Several things may have contributed to the misunderstanding. Firstly, although Mr Bartucciotto was aware that the order he thinks he took from Mr Vidot was much larger than Tony Barlow’s usual order, he also knew that Mr Vidot had recently obtained quotes from Euro Printing in relation to printing jobs for Tony Barlow's stores throughout Australia. Tony Barlow's normal orders related only to its stores in Western Australia. Secondly, Mr Vidot placed the order only two days before he was due to leave for South Africa. Mr Vidot’s father-in-law was very ill and was expected to pass away soon. Mr Vidot had a lot to attend to and may have been somewhat distracted as a result of this. Thirdly, although the price per book was discounted because of the large size of the order, Tony Barlow had in the past paid different prices per book for its orders depending on the nature of each order and whether or not Euro Printing could use one of its existing plates for the printing of the sleeves.
THE TERMINATION
According to Mr Bartucciotto, when the misunderstanding was discovered, Mr Manni told him on the Friday before termination that he, Mr Bartucciotto, would have to make payment to the Respondent for the loss incurred. Mr Bartucciotto said that he felt a bit confused and said to Mr Manni “If I have to pay, I have to pay, but I want to think about it over the weekend”.
On the following Monday, 1 August 1994, Mr Bartucciotto told Mr Manni that as he was not the one who had made the mistake, he should not have to pay. Mr Manni then said “In that case, get your things and go home”. Mr Bartucciotto said “Are you sacking me?” and Mr Manni said “Yes”.
At the time of his termination, Mr Bartuciotto received no money from Mr Manni. Mr Bartucciotto subsequently obtained legal advice. The Department of Productivity and Labour Relations became involved and on 15 February 1995 the Respondent paid $1,711.25 for annual leave and leave loading owing to the Applicant.
Mr Manni stated in his evidence that on the morning of the Friday prior to termination he became aware that there was something wrong with the order from Tony Barlow. He raised it with Mr Bartucciotto when he came in and told Mr Bartucciotto to talk to Mike Vidot about it. The transcript of Mr Manni’s evidence of the events on the Friday when Mr Bartucciotto came back to the office is as follows:
“And did you have any further discussion with Mr Bartucciotto on the Friday?---No, only when he come back in the office in the afternoon. And I said to him, “What’s happened with the job?” And he put the pen down on the table and everything and say, “Mike Vidot is lying. He reckons never gave me the order for 5000 books. He reckons he gave me the order for 5000 leaves. And he doesn’t want to pay it, doesn’t want all this amount of books”. And I say to him, “Did you talk to Mike Vidot?”. He say, “Yeah, that’s what I did”. I said, “What’s happened now? I mean, I got to get my money, from you or from Mike Vidot, somebody’s got to give me the money”. And I ask him, I say, “Did you fax the quote, did you fax everying to Mike Vidot?”. And he said, “No, we did everything verbal”. And that’s when I went a little bit over my head and I said to him, “How can you can do anything verbal? Is for $100, $200, you fax in the price to the client; it’s for 49,000 almost $50,000 you don’t fax an order”. I say, “Where’s the common sense?” And that’s it. And then I said, “If Tony Barlow don’t want to pay” I say give the chance and I say to him to repay $50. “Unfortunately I want to take the company car from him - from you, got to put you through on a different position what would reduce your wages to save some money”. Because to me it was a big loss for the company.”
and further
“he said to me that Mike - Tony Barlow wasn’t prepared to pay for, you know the 49 thousand something dollars. I said to Mario, give you the chance, you know, to pay $50 a week and if Tony Barlow rings up they got to use - will use another 100 books or 200 books or whatever if you already pay - you know the money from Tony Barlow they come direct to you. I gave him all the option that was available to me.
And what did he say to that?---Oh, first he say he was thinking about, he was going home thinking about on the weekend and everything.”
As to the events of the following Monday, the transcript of Mr Manni’s evidence is as follows:
“So, what was said then?---I just ask him, I say “What’s you know what did you decide?” That’s what he said to me, he said “No Tony - Mike Vidot is a liar, he gave me the order for 5000 books and I no pay”.
Right, and what did you respond to that?---I responded to that, I told him sort of that if he wasn’t prepared to pay I couldn’t afford to keep him any more, I mean his job to bring clients - to bring profit for the clients not a loss. And I said, “In that case just leave the car - the company car”, and he said to me, “Can I go home and get the key”, I said, “Yeah, go home with the car - bring the spare key, leave the car in front of my house”.
Was there anything else said during this conversation?---No, I only said to him, I say, you know, “On the job that you’re doing you can’t do it anymore because I can’t trust you and that’s it, its finished”, like that.”
Further, in cross examination, the transcript of Mr Manni’s evidence shows the following:
“Mr Manni, if Mr Bartucciotto had agreed to pay the $30,000 he would have remained as an employee of Euro, is that correct?---Yeah, but doing some other things.
Okay. Now, did you give him any warning that, if he did not pay, you were going to dismiss him?---Friday
Friday. What were your exact words?---I say: I’ve got to get the money off from you or from Tony Barlow.
Okay. I believe in examination-in-chief you said that following Mr Bartucciotto’s advice that he was not going to pay, you said, “Well, I can’t afford to keep you. You’d better leave the company car.” Was there any other discussions about alternatives? Perhaps Mr Bartucciotto - - -?---That - yeah, that’s what I said. That’s - that’s where there’s something wrong there. And I said to him, I say: if you want to work here, even $50 a - even $50 a month, $50 per week, I will keep you here but I can’t afford to give you - to leave you the company car. Maybe I put you through to do something else.”
WAS THE TERMINATION FOR A VALID REASON?
It is not necessary for me to decide exactly what was said by Mr Bartucciotto and Mr Vidot on the day the order was taken, for reasons I will go into shortly. Counsel for the Respondent alleged that Mr Bartucciotto, in not providing written confirmation of the order, was guilty of serious misconduct. It was submitted that it was the standard practice of the Respondent to provide confirmation in writing and Mr Bartucciotto was guilty of misconduct in not following the lawful order of his employer. It was also said that as he was employed as a sales representative, it was an inherent part of Mr Bartucciotto’s function to obtain enforceable orders, or make effective sales, and he had failed in this function. It was said that in not providing written confirmation of the order Mr Bartucciotto acted in a way which was contrary to his own practice in relation to orders.
I have already found, and it is clear on the evidence, that Mr Bartucciotto did not always provide confirmation in writing to his clients, and Mr Manni was aware of this. I do accept, however, the submission of Counsel for the Respondent that Mr Bartucciotto was in breach of his duty of care as an employee in not reducing the order to writing. Whenever orders are taken verbally, there is room for error or misunderstanding. When the order is small, the consequences of the error or misunderstanding may be easily absorbed by the employer. However, in this case, the consequences of the error were grave. The value of the order, being $49,700, differed greatly from the value of the order Mr Vidot maintains he placed, that is $994. In these circumstances, even if Mr Bartucciotto’s version of the facts is correct, and it may well be, he should have sent written confirmation to Mr Vidot or at least have gone into the size of the order more thoroughly with Mr Vidot.
If Mr Bartucciotto’s employment had been terminated for the reason that he breached his duty of care in this respect, I would have found that this was a valid reason under Section 170DE of the Act. However, this was not the reason why Mr Manni terminated Mr Bartucciotto’s employment. Mr Manni terminated Mr Bartucciotto’s employment because Mr Bartucciotto refused to pay him the $30,000 allegedly lost as a result of the misunderstanding or mistake about the size of the order. This does not, in my view, constitute a valid reason for termination connected with the employee's capacity or conduct or based on the operational requirements of the undertaking, establishment or service within the meaning of subsection 170DE(1) of the Act. Mr Manni’s evidence was that if Mr Bartucciotto had agreed to pay the $30,000 by instalments, he would have remained employed by Euro Printing, although he might have taken away his car or changed his duties somewhat. Although I have a considerable amount of sympathy for Mr Manni, Mr Bartucciotto must succeed in his application.
It is therefore not strictly necessary for me to consider whether the Respondent was in breach of Section 170DC of the Act. Mr Bartucciotto’s evidence was that he was not warned that if he did not pay the $30,000 he would lose his job. Mr Manni’s evidence was that he gave Mr Bartucciotto the choice of all the options available to him, namely, that he pay up or he would be out of a job, and that he gave Mr Bartucciotto the weekend to think it over. This kind of ultimatum does not, in my view, amount to an opportunity to respond to allegations within the meaning of Section 170DC of the Act.
Several previous incidents relating to Mr Bartucciotto’s failure to provide written confirmation of an order were raised at the hearing of this matter. As I have found that the reason for termination was not the failure to provide written confirmation but Mr Bartucciotto’s refusal to pay $30,000 to the Respondent, these incidents are not relevant to any consideration of whether procedural fairness was applied. However, the main incident related to an alleged breach by Mr Bartucciotto some eight or nine months before termination and was, in my view, too remote to constitute a relevant warning or an opportunity to respond to allegations within the meaning of Section 170DC. The other incident was an alleged breach discovered one week after the termination and therefore was never put to Mr Bartucciotto at all. Mr Manni said that he had instructed his staff to raise the issue of written confirmation at monthly staff meetings but this evidence was too vague to be of any assistance to this Court. It is therefore likely that, even if the termination had been for the reason that Mr Bartucciotto failed to provide written confirmation of the Tony Barlow orders, I would have held in any event that the procedural fairness provisions of Section 170DC had not been complied with. In the circumstances, as Mr Bartucciotto was given an ultimatum, he was not given a “fair go” as required by the Act in the days immediately prior to termination.
REMEDY
The Respondent’s position is that the Applicant was guilty of serious misconduct and that there was accordingly no requirement for him to be given five weeks' notice as required by Section 170DB.
The Applicant’s position is that this was not a situation of serious misconduct but a situation in which a misunderstanding occurred. I am unable to accept, however, that this was a case of a mere misunderstanding as submitted by Counsel for the Applicant.
The Applicant is in any event entitled separately to a remedy under Section 170EE in relation to the breach of Section 170DE.
The Applicant’s evidence is that at the time of termination he was earning $670 gross per week. He also had the use of a company car. He obtained alternative employment at Parkview Press on 15 August 1994 at a rate of $500 per week with no company car. There is nothing before me which would assist me in quantifying the use of the company car. In any event, it is likely on the evidence of Mr Manni that even if the Applicant’s employment had not been terminated on 1 August 1994 that he would have lost the use of the company car from that date.
Reinstatement is not sought and I accept, from the evidence of bad feeling between the parties and the fact that the Applicant has obtained alternative employment, that it would be impracticable to order reinstatement.
Counsel for the Respondent alleged that the filing of the application in this matter was a tactical move to counteract the local court claim filed against Mr Bartucciotto by Euro Printing in the sum of $25,000 for an alleged breach of contract by Mr Bartucciotto arising out of this incident. In my view this is irrelevant to the question this Court has to decide. If there has been a breach of the provisions of the Industrial Relations Act, the Applicant is entitled to exercise his rights under that legislation.
According to the principles set out by Wilcox, CJ in Nicolson v Heaven & Earth Gallery Pty Ltd (1994) 126 ALR 233, this Court must take into account whether or not the Applicant’s employment would have lasted much longer if the unlawful termination of employment had not occurred. In view of the gravity of the consequences of the misunderstanding relating to the Tony Barlow order and the bad feeling it caused between Mr Bartucciotto and Mr Manni, I consider it unlikely that the employment relationship would have lasted beyond a month or so in any event. In the circumstances, I consider that an award of $1,850 is appropriate compensation in this matter.
I certify that this and the preceding thirteen pages are a true copy of reasons for judgment of Judicial Registrar Boon.
Associate:
Date:
Counsel for the Applicant: Ms B Hickey
Solicitors for the Applicant: Hammond, Worthington, Prevost
Counsel for the Respondent: Mr R Wheatley
Solicitors for the Respondent: Murfett & Co
Date of Hearing: 29 June 1995
Date of Judgment: 20 July 1995
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