Pahuru v Woolworths Ltd t/as Mac's Liquor
[1997] IRCA 204
•17 Jun 1997
DECISION NO:204/97
CATCHWORDS
INDUSTRIAL LAW - Termination of Employment - Industrial Relations - Knowledge of procedures - unauthorized discounts breach of duty of good faith and fidelty - valid reason - summary dismissal- breach of contract
Workplace Relations Act (1996) (Commonwealth) (sometime Industrial Relations Act 1988) ss 170 DB, 170 DC, 170 DE 170 EDA.
Liquor Act 1982 (New South Wales). ss 18, 78
Whitehouse v Queensland (1960) I D 4 CLR 609
Lane & Others v Arrowcrest Group 99 ALR 45
Savvidis v Privleged Clothing Pty Ltd Parkinson JR 28 November 1994 (unreported)
Hayden v Golden Bowl Sports Central Pty Ltd t/as The Sports Club V1 - 453 (unreported)
Shepherd vFelt and Textiles of Aust. Ltd (1931) 45 CLR 359
Phillip vFoxall [1872] 7 LRQB 666
McCasker v Darling Downs Co-op Bacon Association 25 IR 107
Briginshaw v Briginshaw (1938) 60 CLR
Nettleford v Smoker unreported Lee J 4 October 1996 Lee J
Selvechandran v Petron Plastics Plastics Pty Limited (1996) 62 IR 371
Elvidge v Burswood Resort Management Limited Ritter JR 16 December 1996 (unreported)
Yew v Aci Packaging Limited Willocks CJ 11 December 1996 (unreported)
Fargie v Freedom Foods (AUST) Pty Limited Parkinson JR 14 October, 1996
Grace Lupoi v Phillips Fox Ritter JR 3 October, 1996 (unreported)
Garbutt v Stothers Ritter JR 3 October, 1996 (unreported)
Blyth Chemical Ltd v Bushell (1933) 49 CLR 66
North v Television Corp Ltd (1976) 11 ALR 599
Laws v London Chronicle (indicator newspaper) [1959] 2 A11 ER 285
Byrne v Australian Airlines Ltd (1995) 61 IR 32
PAHURU v WOOLWORTHS LIMITED T/AS "MAC'S LIQUOR"
NI 2180 of 1995
Before: LOCKE JR
Place: SYDNEY
Date: 17 JUNE 1997
FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NI 2180 of 1995
BETWEEN:
Christopher Lawrence Pahuru
Applicant
AND
Woolworths Limited T/as "Mac's Liquor"
Respondent
BEFORE: LOCKE JR
PLACE: SYDNEY
DATE: 17 JUNE 1997
MINUTES OF ORDERS
THE COURT ORDERS THAT:
The application be dismissed
Liberty to apply under the terms of this order.
FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NI 2180 of 1995
BETWEEN:
Christopher Lawrence Pahuru
Applicant
AND
Woolworths Limited T/as "Mac's Liquor"
Respondent
BEFORE: LOCKE JR
PLACE: SYDNEY
DATE: 17 JUNE 1997
REASONS FOR DECISION
This is an application under section 170EA of the now called Workplace Relations Act 1996 (“the Act”). The applicant seeks the remedy of compensation and reinstatement in respect of the allegedly unlawful termination of his employment.
It is alleged by the applicant that the termination of his employment by the respondent contravenced sections 170DC, 170DE(1) and 170DB of the Act. In reply the respondent denied each of these alleged breaches of the Act, vouchsafing that Mr Pahuru’s conduct not only provided a valid reason for termination but was also such that no notice or compensation in lieu thereof was required under section 170DB of the Act.
Essentially, it was the respondent’s case, that it had a valid reason for terminating the applicant’s employment as he had sold large quantities of beer at cost price and below without authorization. The goods were recieved by the purchaser without the payment of a license fee which breached section 78 of the Liquor Act 1982 (New South Wales). This fee is based on a percentage of the value ofthe liquor purchased in a past period. This is not a duty of excise as it is not a tax on the commodity itself - Whitehouse v Queensland (1960) 104 CLR 609. Monies due and owing under this provision is recoverable as a debt due to the Crown. Sanctions flow for the non-payment of this fee.
Other matters were raised as being grounds validating the dismissal of the applicant. However, they were not put to him at the time of dismissal and are matters subsequent.
The alleged missing monies was not within the respondent’s knowledge at the relevant date and cannot stand for a valid reason for terminating, notwithstanding what was said by the Court in Lane & Others v Arrowcrest Group 99 ALR 45.
In order to comply with the Act the respondent must establish a valid and contemporaneous reason for terminating employment, which reason justifies the termination (see Savvidis v Privileged Clothing Pty Ltd, Parkinson JR, 28 November 1994, No VI-357 of 1994, unreported. See also Hayden v Golden Bowl Sports Central Pty Ltd t/as The Ultimate Sporting Club, VI-453 of 1994, unreported.
At common law it has long been accepted that an employer could justify a wrongful dismissal retrospectively by relying on information not know at the time of the dismissal but discovered subsequently (see Shepherd v Felt and Textiles of Aust. Ltd (1931) 45 CLR 359 and Lane and Others v Arrowcrest Group Pty Ltd, 99 ALR 45 (supra).
The enactment of the Act has overtaken the common law and , arguably, despite the existence of the after acquired information, the respondent is still required to establish a contemporanious valid reason to support termination but may rely on the after acquired evidence. However, the facts of this case are distinguishable from cases where this consideration forms part of a decision.
Lane’s case was heard before the enactment of the Act and dealt with the question of whether the employee’s dismissal was harsh, unjust and unreasonable in circumstances where after termination the employer discovered that the employee, Agirox, had fabricated material about his past employment when he applied for his job with the employer. The Court accepted that if the employer had known of the falsehodds it would not have employed Agirov. Despite Agirov’s claim that the falsehoods came about because of financial necessity the Court found amongst othe things (see page 75 et seq.) that this dismissal, because of Agirov’s fraudulent misrepresentation, was not harsh, unjust or unreasonable.
However, as ex past facto knowledge is not the only ground or grounds for the instant termination, Lane (supra) is not material to the decision in this case.
On the applicant’s own account he had given discounts as alleged. Two purchasers come to mind as significant. The first being to a company called Bonvale Holdings who operated the Olympic Hotel in Moore Park Road, Paddington. The licensee, one Wakely, was the son-in-law of one of the staff members. A restaurant called “Harry O’s”, was the recipient of similar largesse, in the form of cartons (24) cans of Victorian Bitter (“VB”) cans for $22.95 less a further discount of 5%. Two cheques in the sum of $3000.00 were tendered in payment by the owner of this eatery and were subsequently dishonoured. This did not take into account the license fee payable under section 78 of the Liquor Act 1982 and was stated to be below cost price. Exhibit 3, the range book sets out the cost price of specific goods plus the sales price, the former being $21.05 and the recommended sale price $26.45. The Liquor memo (exhibit 4) gave new beer prices effective 14/02/95, sale price for a case was $26.45. The advertised/promotional lines report, (exhibit 5)week commencing 06/02/95, the price for a case was set at $23.95 and then rose to $24.45 in the week commencing 20/02/95.
Exhibit 20 sets out, “Chris sold cases of “VB” to a customer at $22.95, 6.13% less than the advertised price and then gave a further 5% discount bringing the price down to $21.80, only 75 cents above the cost price.”
The amount of liquor sold to Bonvale by the Penshurst store of the respondent exceeded $17,000 although it cannot be said that this sum was in its entirely referrable to cartons of “VB” cans.
Section 18 of the Liquor Act provides:
“the Court may grant licences... an off licence is a form”
Subsection 3 of section 18 provides:
“a off licence may be a) a licence to sell liquor by retail
b) ......c) a licence to sell liquor to persons authorized to sell liquor.
Table 13 to the Act as set out in McDonalds Licensing Laws of New South Wales notes that a licence under section 18 of the Act does not authorize the holder or holders to sell liquor. Thus it can be seen that selling to Bonavale was a breach of a term of the respondent’s licence. The respondent was only entitled to sell liquor by retail.
It was the appliant’s contention $22.95 was either the recommended retail price or one in respect of which he had authorized, to give either specially or generally.
Applying common sense it is evident that the purchases Bonvale and “Harry Os” would hardly have travelled the distance from Paddington and the City respectively to purchase liquor at Penshurst unless given the most attractive terms. The evidence sustains a finding that such were the terms of the purchase, courtesy of the applicant’s munificence. Doubly so in the case of Bonvale as it also was able to avoid the provisions of the Liquor Act, 1982.
Just as improbable are the adjurations of Mr Pahuru that he was ignorant of certain procedures of the respondent. That a profitable and efficient conglomerate such as the respondent would appoint to a postition of trust a person lacking basic attribututes and who is ignorant of certain practices, beggars belief.
THE APPLICANT
In about 1988, the applicant commenced his employment with “Mac’s Liquor” at its Roseberry establishment as a casual salesman. The company was the respondent’s predecessor in title. As a competent and industrious worker, the applicant first won permanent status then became Roseberrys’ assistant manager and finally advanced to manager at Roseberry, then at Penshurst. He ceased employment with the respondent on 21 April 1995 upon his summary dismissal.
It was noted by his superiors, that when he first became manger at Penshurt, both sales and gross proft increased considerably. Indeed, until the events which led to his dismissal unfolded, the applicant had never come under adverse notice because of conduct or perfomance. Cognizence was taken of these matters in reaching a decision as to whether there was a valid reason or not.
Exhibit 1, the respondents’profit and loss report indicated that between October 1994 and February 1995 the Penshurst store had not met its budget. Naturally, this caused some pertubation amoung those superiour to him and an investigation was launched to ascertain why this was so. As manager, the applicant occupied a position of trust within the company. From this certain benefits flowed. However, it was also a position which carried with it duties and obligations.
THE ISSUES
Having received evidence of an admission by the applicant that he was indeed selling liquor at discount, what remains to be decided is whether or not what the applicant did by act or omission consituted a valid reason dismissing him. The reason given was that he breached company policy. Responding, the applicant’s evidence was that what he did was to boost the sales of the respondent’s undertaking in an authorized manner, without knavery and profit to himself.
In order to arrive at a conclusion on this question, involves attention being focused on various aspects of Woolworth’s policy and marry that to the evidence given by the applicant and the various witnesses for the respondent. This will necessitate a finding as to the credibility of witnesses.
So far as the companies discounting policy is concerned evidence of such fell from the various witnesses and also formed part of the documentary evidence. Indeed when subsequently interviewed by the police, the applicant made a statement to the effect, that he was fully aware of company policy... all he was trying to do was increase sales. See exhibit 25.
BONUS SYSTEMS
It was the respndent’s practice to pay store managers a bonus of approximately ten percent of his or her salary at the end of January and June of each year. It was a condition of this payment that the various stores maintain their margins and reach the stores projected retail sales. Deposing in his affidavit of 3 october 1995, Mr Anderson, the respondent’s Group Manager Liquor (under whose supervision was the Penshurst store) said:
“Each bonus payment is around $3,300.00 and we may pay store managers as much as $7,000.00 per year.”
To the extent which store met or budget was determinative of the amount of the bonus. This flies in the face of what the applicant averred that received no personal gain from the exercise. The blandishment was such low prices made the purchase of liquor viable to the two commerical establishments already mentioned - to the proprietors direct financial advantage.
Indirectly the applicant might profit in that sales on a large scale could ensure the payment of a bonus and indeed, its measure. I am satisfied that this was the case despte the applicant disavowing it as follows:
“No, I was out there to made money for the company...”
When pressed, he added that he was interested in receiving this emolument. Thus it could be said that the applicant was engaged in a joint enterprise with, at least, Mr Wakeling to breach a law of the state. That he had knowledge of wrong doing is evidence by the statement he reduced to writing which became exhibit 7 written on the letterhead of Mr Wakeling’s undertaking.
It is quite clear from this documentary evidence the applicant was dessembling as to his knowledge of the saleprice of the goods.
Taken together with other evidence this does not lead to a conclusion compatible with innocence.
Mr Simon Davidson was the most compelling witness on the question of authorization of discounts.This is also set out in exhibit 6, whilst 17, 18, and 19 and are proof of the policy as to the allowing of staff discounts.
No evidence fell to the contary that Mr Wakeling was the son-in-law of an employee at Penshurst.
Exhibit 17 dated February 1995 sets out the class of person who may be given a five percent discount. The document refers to staff oly, but the evidence supports the fact that members of the employees immediate family could untilize a card issued to staff. The applicant gave evidence his de facto wife used his card with impunity.
What is transparent from the evidence both oral and documentary is it was never meant to extend to in-laws conducting commercial enterprises. However, why “Harry On” and others received the staff discount did so was never convincingly explained. It would be unsafe and unsatisfactory to make a finding that the applicant did not have an appreciation of category of persons so entitled.
Deposing as to the authorization of discounts, other than those allowed to employees, Mr Davidson said at paragraph 3:
“I understand that if a Store Manager wishes to give a customer a discount on Mac’s liquor products then they must do so in accordance with the Mac’s Liquor Discounting Policy. This Policy requires Store Managers in the first instance to contact Mr Les Anderson the Group Manager, Mac’s Liquor for approval. If and only if Mr Anderson is not available due to being on annual leave or if it was outside his ordinary hours then Store Managers are required to contact a Base Store Manager for approval of their discount. Part of my duties as a Base Store Manager included being on call for Store Managers to consult in relations to approval of discounts. In my area I am in charge of 20 Mac’s Liquor Stores which has included in the past the Penshurst Mac’s Liquor Store in which the Applicant Mr Christopher Pahuru used to be the Store Manager.”
This is how the applicant told of his understanding of discounts and their authorization in his affidavit 1 September 1995 and from which his oral evidence did not deviate in any material respect.
.....I was never aware of the precise levels of fees associated with the liquor licence.
I said, “Well that’s the first that I’ve known of that.”
He said, “Chris, stop bloody lying to me. You knew.”
I said, “You are lying to me again. Look at these.” He showed me a list of all the discounts for the last three months.
I looked at the document and said, “Yes, they are my transactions. What’s wrong with them? You’ve got beer at $22.95 and with a 5 per cent discount off that’s $21.80.”
He said, “You are lying to me again. Beers are not $26.45.”
I then had to excuse myself again so that I could be sick.
It is my understanding, based on instructions from previous manager and from memo’s that were sent to stores at times, that the relevant policy of the respondent in relation to discounts was:
a) Staff are issued with a discount card entitling them to 5% discounts.
b) Staff are not allowed to operate the cash register on the transaction where they are purchasing for themselves or their immediate family.
c) Members of the immediate family of staff are also entitled to the same discount.
d) The discount applies in addition to any other discounts. For example, Woolworths’ policy also allowed discount of up to 5 per cent on any purchase of $200.00.
In this case the discounts were given to the son-in-law of Margaret Bennett, a casual employee of the store who had been issued with a staff discount card by Woolworths. I believed the son-in-law was sufficiently immediate family to qualify for the discount. I did not know the son-in-law other than through the employee. That is, he was not a personal friend of mine.
The same discount was applying to ther staff members.
(It is noted the applicant’s residence was in close proximity to the hotel).Mr Anderson then said, “This store is losing $1,000.00 a week. Someone here is taking money from this store.”
Prior to this, I had not been aware of such alleged losses. I was not shown any figures to verify this or to show how the alleged losses were calculated.
Regarding the granting of discounts I say:
a) It had at one time been my practice to ring the base store at Coogee if a customer was seeking a discount which did not conform with the official discount policy. Normally I would speak to Mr Simon Davidson, who was the manager of the store. The Coogee store was the main store and he was a recognised point of reference for this type of matter. Typically Mr Davidson would say to me, “You are the manager, use your discretion.”
b) I became so familiar with this response that in time I ceased to bother obtaining his authority. I cannot recall a single incident where I telephoned Mr Davidson and he declined to approve a non-official discount. I came to believe that it was within my ordinary responsiblilites as manager to exercise my discretion in relation to the granting of discounts.
I made it my practice not to grant discounts below the cost price as it appeared in the “Range Book” as this would have involved selling the goods below cost. In fact it was not my practice to go as low as the Range Book at all, but rather if for example there was a limit of 6 bottles on a special I might authorise the sale of a larger volume than 6 bottles.
If a person had a staff discount card then I would give discount below the advertised special price of 5% based on that card. This would still not take the price of the goods below the cost price as it appeared in the Range Book.
The level of supervision given by Les Anderson was minimal. Basically the only thing that he was interested in was the extent to which the shop was meeting its sales budget.
This is what determined my bonus and his. There might be discussion of sale startegy but there was very little discussion of administrative matters and limits on discounting powers. I was on good terms with Mr Anderson until my termination.
Mr Davidson swore that the only time a reference to him would be necessary if Mr Anderson was not available and he was in attendance at the Coogee branch. He said he had not clear recollection of Mr Pahuru ever calling him to approve a discount. Since January 1993, he had in place a procedure of making notes in his diary whenever he received a request for a discount from a Store Manager. Primarily though, his evidence was based on his independant recollection as he only had his 1995 diary availabble as an aid to his memory. There exists a material divergence between the applicant and respondent on this point.
Mr Anderson,in my view, gave a balanced , honest and full account of those matters of which he had knowledge. He appeared to recall events with accuracy and his oral evidence did nothing to cast doubt on his recollection or capacity to provide probative material. His account is preferred to that given by the applicant. Indeed, no weight was given at all to his version when it conflicted with that of Mr Anderson and othe witnesses who testified regarding authorization. It is my view, the applicant acted unilaterally in selling at a discount to the hotel, restaurant and others just as it also my view , the applicant did not have vested in him a general discretion to reduce prices. That the applicant was aware of this policy is beyond doubt. Exhibit 6, among other material was exhibited at the store and the probabilities are that it was placed here, by the applicant. as manager.
It was submitted by Mr Coleman, Counsel for the applicant that bulk sales to commercial enterprises was condoned by Mr Anderson, the applicant’s superior officer, as he had spoken with the applicant about one of the dishonoured cheques form “Harry Os” just how much notice Mr Anderson had is not clear from the evidence. Mr Pahuru said that Mr Anderson had spoken with him prior to 21 April 1995, leaving the question open as to the time of Mr Anderson’s recollection. He put it as being in April that being so it would have been within the investigation period conducted of the modus operandi of the Penshurst store. No documentary evidence was tendered to show that there had been any transactions with “Harry Os” during that month to compromise this evidence. No cross exmaination took place on the point.
Philips v Foxall [1872] 7 L R Q B 666 at 680 sets out the principles applying in this situation :
“Now the law gives the master the right to terminate the employment of the servant on his discovery that the servant is guilty of fraud. He is not bound to dismiss him and if he elects after knowledge of the fraud to continue him in his service he cannot at any subsequent time dismiss him on account of that which he was waived or condoned”
Relying on the application of this principle in McCasker v Darling Downs Co-op Bacon Association Ltd [1988] 25 1R 107 at 114 Ryan J doubted whether the respondent by a particular act waived and condoned certain activity. Applying those principles, so here too I doubt very much the respondent acquiessed in the applicant’s activity. The “Harry Os” transactions was but one of many, it being a matter under the review then being conducted by Mr Anderson.
Exhibit 3, the range book, was a very important document indeed so far as the respondents; undertaking was concerned.
It is important because of the evidence in this case. Especially the range of the testimony given by the applicant in relation to discounting such as “in house specials (abolished since 1994)” meeting competitors prices by comparison with those set out in local newspapers, bulk sales, to mention but a few. However, no matter what was the appellation given it required authorization.
M/s Bonnie Sacks giving probative and cogent evidence on its importance and passage said it was sent to the various branches every month, indicating the various price changes which were to operate uniformly in every store. Included with the range book were price change cards and tickets. It was delivered by courier.
What the applicant said about the receipt of the range book was in contradistinction to that which fell from M/s Sacks. He alleged he only received the range book about twice a year and :
“we had to ring up for an updated version of the range book - the date on the range book used to be really old. We used to get it updated, we used to askk, we had to actually ring up and ask for a new range book.”
Reviewing this evidence together with that given by other witnesses, I cannot accept the applicant version. I opine it as an attempt by the applicant to tailor his evidence to fit what he perceived would provide a rationale that would support his allegations of lack of knowledge of the true cost price of items, the comtempory selling price and other matters in contention.
CREDIT OF WITNESSES
Some findings have already been made on the credit of witnesses. I do not propose by further narrative to traverse the specific evidence upon which I base these conclusions. Enough to allude to such of the documentary evidence which do not sustain the applicant’s assertions. As to other fact’s adduced at the hearing which were relevant when those of the respondent’s witnesses conflict with those of the applicant, I prefer the former.
Giving evidence over a two day period the applicant presented as a person lacking in credit. I had differently with the manner in which he presented his evidence. It was studied and eqvivocal and in various ways it was internally inconsistent. His evidence is chief was compromised in cross examination.
ONUS OF PROOF
Pursuant to section 170 EDA of the Act, the respondent bears the onus of proving that there existed a valid reason for the termination of Mr Pahuru’s employment.
Indubitably the allegations made against the applicant were serious and the respondent characterized them as being so
Thus it is incumbent upon the Court to hear in mind the cautionary words of the High Court of Australia in Briginshaw v Briginshaw (1938) 60 CLR 336 and in particular what felt form Dixon J (as he then was) at 362: -
“It is enough that the affirmative is made out to the reasonable satisfaction of the tribuanal. But reasonable satisfaction is not a state of mind that is attained or established independantly of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unliklihood of the occurance of a given description or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable sastisfaction of the tribunal. In such matters reasonable satisfaction should not be produced by inexact proofs, indefinite testimony, or indirect references.”
Reading this citation, it becomes obvious that the party hearing the onus of proof can only discharge it by bringing evidence of sufficient cogency and persuasiveness of the matters alleged
Whilst the standard remains a civil standard, the proof of the probabilites is higher. A high probability indeed, though not as high and serious of beyond reasonable doubt.
THE TERMINATION
On 21 April 1995 at about 8:55 A M the applicant and Mr Anderson spoke about the giving of discounts at the store which were alleged by the group manager to be below cost price. He was also spoken to about other matters in contention. Deposing in his affidavit of 1 September 1995, he gave a comprehensive account of the colloquy which ensured between the two, leaving no doubt that he was fully armed with the facts and circumstances that led to his dismissal.
Subsequent to his making with Mr Anderson the applicant had discourse with Mr Stephen Archer, the respondents security manager since January,1994. Exhibit 24 constituted his affidavit sworn in the proceedings. Interestingly, during the course of this conversation Mr Archer alleged that the applicant admitted he was who made the decision to authorize discounts and that he was aware of company policies.
In some respects there is a divergence of facts alleged by Mr Archer and the applicant.
Should it be thought that there was a lack of clarity in making the allegations by Mr Anderson there was no such vice in the manner that Mr Archer asserted the applicant breached company policy by giving false discounts and “unauthorised mark down of stock”
Some time later the applicants employment was terminated. An entry was made in the respondent’s industrial log book (exhibit ‘N’) and the applicant appeared to read that entry and then signed it. This seemed to me to be an objective indication of which account should be preferred.
SUMMARY DISMISSAL FOR SERIOUS MISCONDUCT
Determining whether the decision to terminate to applicant’s employment summarily was for a valid reason, that is, was it reasonably open to the employer on the material available, involves a consideration of various indicia.
Since the decision of the High Court of Australia invalidating section170 DE (2) there has been further consideration by at least three judges of this Court as to what is comprehended by section 170 DE (1).
In the case of Nettlefold v Kym Smoker Pty Ltd, (unreported) Lee J 4 October 1996, his honour at pages 5 and 6 referred to the well-known remarks of Northrop J in Selvechandran v Peteron Plastics Pty Limited (1996) 62 IR 371 at 373 on the meaning of the expression “valid reason”. Northrop J said
“In its context in section 170 DE (1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of section 170 DE (1). At this same time the reason must be valid in the context of the employees’s capacity or conduct or based on the operational requirements of the employer’s business.
Further, in considering whether a reason is valid, it must be remembered that the requirement applies in a practical sphere of the employment relationship between an employer and an employee, where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must be applied in a practical commonplace way, to ensure that (a) the employer and employee are each treated fairly.”
In relation to a case where the respondent alleged that the valid reason was based on misconduct, there are essentially two things which need to be proved: first, the respondent needs to prove that the misconduct did occur and secondly, the respondent needs to prove that the misconduct involved was sufficiently serious to warrant the sanction of dismissal. In relation to the first matter, I cite the authority of Elvidge v Burswood Resort Management Limted, unreported, IRCA 631/1996,16 December 1996, Ritter JR, and also the decision of Yew v ACI Glass Packaging Pty Limited, unreported, 596/1996, 11 December 1996, Wilcox CJ.
In the Yew case, at page 12, the Chief Justice said that:
“The effect of section 170 DE (1) is to make unlawful a termination of employment effected without a valid reason. If the termination comes before the Court it is the duty of the Court to determine for itself whether, upon the balance probabilities, there was a valid reason for the termination. It must do this by reference to the evidence. The Court in not concerned with the question whether, upon the information available to the employer, the conclusion reached by the employer was, or was not, a reasonable one.
I agree that the Court does not sit as an appeal from the employer’s decision, but only because the reference to an appeal implies that the Court is concerned to examine the employer’s decision making process. It is not. It is concerned to ascertain whether there was a valid reason for the conclusion that the employee’s employment should be terminated. The Court does this for itself but on the basis of the evidence of the primary facts placed before it.
So far as to the second proposition is concerned the misconduct has to be sufficiently serious to warrant the termination of employment, I make reference to the decisions of Fargie v Freedom Foods (Aust) Pty Ltd, unreported, IRCA 498/96 Parkinson JR, 14 October 1996 and also to Lupoi v Philips Fox, unreported, IRCA 485/96, Ritter JR, 3 October 1996. In earlier in of Garbutt v Stothers, unreported, IRCA 416/96 Ritter JR, 27 August 1996. At page 5 of the Garbutt decision, Ritter JR held-
“Where there is a termination based on misconduct, for there to be a valid reason for termination, the misconduct must have a quality sufficiently serious to warrant the termination of employment. For example, it would be difficult to say that a secretary of a large office, who stole one paper clip could be characterised by her employer as dishonest and a thief, and therefore, there was a valid reason for termination of employment. In my opinion, there must be a qualitative aspect of the misconduct, sufficient to warrant the sanction of termination.”
What I understand Ritter JR to be saying is there should be a qualitative approach taken, to any misconduct alleged. This is the course upon which I embarked in arriving at a decision in this matter.
During the course of submissions, Mr Hatcher of Counsel referred to the principles ennunciated in Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66. There is nothing in that decision that is inconsistent with the principles already mentioned. Having regard to all the circumstances of the case, the respondent has discharged the onus it bears to prove on the balance of probabilities that it had a valid reason for dismissing the applicant.
I turn now to consider whether in the circumstances and having regard to the applicant’s conduct was it open to the respondent to terminate the employment for serious misconduct. The nature of the entitlement to dismiss on the ground is that the conduct is so serious as to be unconsistent with an intention to continue with his obligation under the contract. The following extract from the joint judgement of Evatt and Smithers J.J in North v Television Corp. Ltd (1976) 11 ALR 599 at 609 is of relevance in this regard. This is what fell from their Honours:-
“For the purpose of the application of the common law principles to the facts of this casem the remarks of the master of the Rolls in Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 AII ER 285 at 287 and 289 are in point he said. Since a contract of service is but an example of contracts in general, so that the general law of contract will be applicable, it follows that, if summary dismissal is claimed to be justifiable, the question must be whether the conduct complained of is such as to show the servant to have disregarded the essential conditions of the contract of service.
I.....think.....that one act of disobedience or misconduct can justify dismissal only if it is of a nature which goes to show (in effect) that the servant is repudiating the contract or one of its essential conditions; and.......therefore.......that disobedience must at least have the quality that is “wilful” it does (in other words) connote a deliberate flouting of the essential contractual conditions.”
Until the terms and conditions of the contract are known and identified it is impossible to say whether any particular conduct is in breach thereof or is a breach of such gravity or importance as to indicate a rejection of the contract.
One cannot begin any inquiry unless it is ascertained what work the employee was employed and undertaken to perform. It is also requisite to inquire what particular obligations had been agreed upon as important or even vital.
In Blyth [supra] Dixon and Mc Tiernan JJ held at 81:
“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 destructure, of the necessary confidence between the employer and employee is a ground of dismissal.....But the conduct of the employee must itself involve the uncompability conflict or impediment,he, destructive of confidence. An actual repugnance between his acts and relationship must be found. It is not sufficient that grounds for uneasiness as its future conduct arises.” (Emphasis added).
Having regard to the conduct of the applicant, particularly by failing to obtain authorization for discounts and being a principal with the licensee of the Olympic, to avoid payment of revenue in breach of the law, it would not be logical or reasonable to require the respondent to continue in the applicant’s employment either generally or during the period of notice set out in section 170 DB of the Act. There was sufficient evidence to establish misconduct. Byrne v Australia Airlines Ltd (1995) 61 IR 32 At 43. The applicant’s conduct was of sufficient gravity and repugnance so as to conflict with his duty of fealty to his employer, who was entitled to summarily dismiss him.
PROCEDURAL FAIRNESS AND SECTION 170 DC OF THE ACT
Evidence of the proceeding at the meetings held between Messrs Anderson and Archer on one hand and the applicant on the other has been the subject of much reflection. Mr Archer’s evidence was of much assistance as he took notes of what occurred at the meeting between the applicant and himself. Even on the applicant’s own version of what took place, was enough to satisfy me that the applicant’s knew what was being addressed and that he was given the opportunity to give a responsive explanation to the allegations relating to his conduct.
Having regard to these matters I dismiss the application under the Act. That is enough to dispose of the matter under the legislation. Consideration does not have to be given to the claim for stress made by the applicant.
CROSS CLAIM
BREACH FOR CONTRACT
A cross claim was filed in the proceedings alleging breach of contract by the applicant - his act of not complying with a term of his contract by authorizing those under his supervision to sell liquor at a discount he was not personally empowered to give. It was further alleged that as a result of the breach, the respondent suffered loss and damage.
Because of findings already made, the respondent should succeed on the said pleading. The onus of proof must be discharged by the Mac’s Liquor of the fact of the breach of contract and the, quantum of damages claimed. I am not satisfied on the evidence that the respondent has made out its claim on quantum. Thus I made no orders in respect of the Cross Claim.
I certify that this and the preceding 23 pages
are a true copy of the reasons for decision of
Judicial Registrar Locke.
Associate: Dianna Fong
Dated: 17 June 1997
APPEARANCES
Counsel appearing for the applicant: Mr P. Coleman Counsel appearing for the respondent: Mr G. J. Hatcher Dates of hearing: 24 May 1996, 21 and 22 February 1996, 11 December 1995 Written submissions complete:
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