Paskalidis v Fleming t/a South Oakleigh Motors

[1996] IRCA 504

DECISION NO:504/96

C A T C H W O R D S

INDUSTRIAL LAW  - TERMINATION OF EMPLOYMENT - claim of UNLAWFUL TERMINATION - whether employee on PROBATION pursuant to Reg 30B - COSTS.

Industrial Relations Act 1988 (Cth) Ss 170EA.
Industrial Relations Regulations Reg 30B.

Evangelus PASKALIDIS -v- DAVID CHARLES FLEMING trading as SOUTH OAKLEIGH MOTORS 
VI 1827 of 1996

BEFORE:       R. D. FARRELL JR
PLACE:          MELBOURNE
DATE:            25 September 1996

IN THE INDUSTRIAL RELATIONS     )
COURT OF AUSTRALIA  )
WESTERN AUSTRALIA  )
DISTRICT REGISTRY  )         

No. VI 1827 of 1996

BETWEEN:  

Evangelus PASKALIDIS
  Applicant

AND:  

DAVID CHARLES FLEMING
(trading as SOUTH OAKLEIGH MOTORS)
  Respondent

MINUTE OF ORDERS

BEFORE:                R. D. FARRELL JR

PLACE:                   MELBOURNE

DATE:  25 September 1996

THE COURT ORDERS THAT:

1.         The application is dismissed.

NOTE:           Settlement and entry of Orders is dealt with by Order 36 of the   Industrial Relations Court Rules

IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY

VI 1827 of 1996

BETWEEN:

Evangelus PASKALIDIS
Applicant

AND:

DAVID CHARLES FLEMING
(trading as SOUTH OAKLEIGH MOTORS)
Respondent

REASONS FOR DECISION
(Delivered ex tempore - revised from transcript)

25 September 1996   R. D. FARRELL JR

1. This is an application under Section 170EA of the Industrial Relations Act 1988 arising from the alleged unlawful termination of the employment of the applicant, Mr Evangelus Paskalidis (“Mr Paskalidis”), by the respondent, Mr David Clarke trading as South Oakleigh Motors (“the car yard”).

1. The respondent contends that the applicant is excluded from the application of the relevant provisions of the Act because, for the purposes of regulation 30B(1)(c), he was an employee serving a period of probation where the duration of the period, namely a month, was determined in advance and was reasonable given the nature and circumstances of the employment.

1. The respondent further contends that, in any event, the applicant was terminated for a valid reason connected with his capacity and conduct in that his work performance had caused them to conclude that he was not suitable for the job within 8 days of his commencing work.

1. The applicant denies that the duration of the period of employment was determined in advance and denies that his work performance constituted a valid reason for the termination connected with his capacity and conduct.

Findings of Fact

1. South Oakleigh Motors was a car yard. The car yard required additional resources in its finance section, which dealt with applications for finance and insurance on behalf of the car yard's customers. The pressure of work arising from sales was more than the sole remaining employee in that section, Mr Tsirigos, was able to cope with. The General Manager of the car yard, Ms Lily Hughes, therefore resolved to hire an additional employee in the finance section and instructed the car yard's corporate secretary, Ms Jennifer Shinkfield, who handled day-to-day personnel matters, to initiate a recruitment process.

1. Ms Hughes hoped that the recruit would take over the management of the section, given that Mr Tsirigos, while competent, was still somewhat inexperienced. An advertisement was therefore placed for a finance/insurance business manager. There were some responses to the advertisement but they were deemed to be unsuitable.

1. Mr David Potts of AIM Insurance, which was the car yard's recommended insurer, became aware that the car yard was seeking to recruit someone for their finance section. He drew Ms Shinkfield's attention to two candidates who had unsuccessfully applied for a similar job in another car yard, where AIM had organised the recruitment.

1. One of those candidates was Mr Paskalidis. Mr Paskalidis had a background in the insurance industry and limited experience of finance. He had no experience in the automotive retail trade. He had recently been in business for himself in the insurance area but had then suffered a period of over 12 months' unemployment immediately before applying for the job at South Oakleigh Motors.

1. Mr Potts advised Ms Shinkfield and Ms Hughes that he thought Mr Paskalidis would probably be able to fill the position capably. Clearly, Mr Paskalidis did not possess the credentials required in the advertisement. He was interviewed by Ms Shinkfield and then later by Ms Hughes in the company of Mr Potts over a period from early to mid-May 1996.

1. By then, according to Ms Hughes and Ms Shinkfield, it had been decided that the car yard would hire someone in the position of "consultant" to work with Mr Tsirigos, rather than hire someone to manage the section. Mr Paskalidis gave evidence that he was lead to believe by Ms Hughes that his position would be a management position. The job description with which he was later provided describes the position as “finance and insurance consultant”. Ultimately, I suspect, these are matters of emphasis and any confusion Mr Paskalidis may have had or any failure of Ms Hughes to communicate the position is probably of no great weight.

1. The first threshold question to be decided is whether or not there was a probation period fixed in advance.

1. Ms Hughes says that towards the conclusion of the final interview with Mr Paskalidis she told Mr Paskalidis that, while she was not comfortable with his background and his limited experience, she would give him an opportunity and that he would be employed on a one month trial period. She also told him he would be paid a retainer of $40,000 per annum plus commission.

1. Mr Potts, who was present at that interview, recalls some reference being made to a trial period but says the issue of a trial period was not dwelt upon. Ms Hughes agrees that it was “one matter raised amongst ten”. Mr Potts does not recall any reference to the length of the trial period. By contrast, on the matter of the retainer he recalled that a figure was mentioned, though he could not recall the particular figure.

1. There is some conflict between the evidence of Ms Hughes and Ms Shinkfield on the one hand and that of Mr Paskalidis on the other, regarding whether or not it was made clear to Mr Paskalidis at the conclusion of the interview that he had the job or whether Ms Hughes said they would get back to him.

1. After the interview, Ms Shinkfield was given the job of calling Mr Paskalidis to advise him of the details of the job including, importantly, when he was required to start work. I am satisfied, having considered Ms Shinkfield's evidence, that the length of the probation period was not one of the details she conveyed at the time she made that phone call. Nor did Ms Shinkfield recollect raising the probation period during her previous interview or interviews with Mr Paskalidis. She says she may have done; Mr Paskalidis says she did not.

1. Ms Shinkfield gave evidence that soon after Mr Paskalidis started work on Thursday, 16 May 1996 she presented him with a draft letter of engagement. She says it included the following paragraph:

   “South Oakleigh Motors wishes to welcome you in your employment as finance and insurance and after-market sales personnel. Your employment in this area will be on a 1-month's probation basis.”

1. There is ample evidence from Ms Shinkfield, Mr Ockleshaw and Ms Hughes that this was a standard clause in all letters of engagement and that probation periods were standard within the car yard. This original draft was never signed by Mr Paskalidis; indeed, he denies ever having sighted the draft. Ms Shinkfield explains Mr Paskalidis's failure to sign the draft as being due to his having queried the provision in the letter dealing with the allocation of commission and to Ms Hughes wanting an obligation of confidentiality included. Ms Shinkfield therefore prepared a second draft of the letter, over-writing the first draft in the process. It appears that draft was also never signed.

1. Ms Shinkfield recalls that when Mr Paskalidis considered the first draft, he briefly raised the probation clause, before going on to more substantially query the commission. Mr Paskalidis, who denies ever having sighted the first draft, also denies having raised the probation clause as Ms Shinkfield claims.

1. Finally, when Mr Paskalidis was advised by Ms Shinkfield on Thursday, 23 May 1996 that his employment was being terminated because he was considered to be unsuitable, it was Mr Ockleshaw's evidence that he recalls Mr Paskalidis responding that he thought he had a month to prove himself, and that he felt he had not been given a chance.

Whether Regulation 30B Applies

1. Prior to hearing Mr Paskalidis's evidence, it was very unclear in my mind as to whether the period of probation had been determined in advance. It seemed clear it would depend on my finding of fact as to what had been said at the final interview with Ms Hughes.

1. In my view, for regulation 30B to apply, the period of probation would have to have been determined in advance of Mr Paskalidis accepting the car yard’s offer of employment. On any view of the evidence, the latest time that could have occurred was during Ms Shinkfield’s telephone call wherein she told him when to start work.

1. Anything that happened after Mr Paskalidis commenced work could therefore only be relevant insofar as it reflects on what must have happened before he commenced work.

1. To that end, Ms Shinkfield's evidence that Mr Paskalidis raised the question of probation when presented with the draft letter of engagement might be relevant, for example, to suggest that it was the first he had heard of it. Similarly, the evidence of Mr Ockleshaw regarding what Mr Paskalidis said at the time of his termination might be relevant in terms of what Mr Paskalidis’ understanding of the position might have been.

1. When it came time to hear Mr Paskalidis, his evidence was that throughout his employment and indeed, until such time as his solicitor advised him of it, he was never aware that he had been subject to a probation period or a trial. That puts Mr Paskalidis's evidence at odds not only with the evidence of Ms Hughes and to a slightly lesser extent, Mr Potts, but also with that of Ms Shinkfield and Mr Ockleshaw.

1. While Ms Shinkfield was not the most organised witness from whom to lead evidence, I had no cause to doubt her credibility, given the manner in which she gave her evidence. Indeed, the uncertainty with which she gave her evidence arose, in my view, from the obvious care she was taking to ensure that her evidence was accurate. I also note that she is no longer employed by the car yard. Mr Ockleshaw also impressed me as a witness.

1. Given the conflict between the evidence of Mr Paskalidis and that of Ms Shinkfield and Mr Ockleshaw, when I came to consider the differing accounts of what was said at the final interview from Mr Paskalidis, Ms Hughes and Mr Potts, I have preferred the evidence of Ms Hughes. Had it only been Ms Hughes with whom Mr Paskalidis was at odds, it might have been a different matter but he is at odds with almost every other witness called.

1. I have taken it into account that Mr Potts does not recall a length of trial period being mentioned, and that he is of the view that it is more likely that it was not mentioned at all rather than a particular period having been mentioned which he does not recall. However, it would have been a matter which was of more direct interest to Mr Paskalidis and to Ms Hughes and it may well have been a matter upon which Mr Potts did not really feel the need to concentrate.

1. I also have taken into account counsel for the applicant’s submission in relation to the wording of the termination letter which somewhat oddly refers to an award provision rather than to the existence of a trial period. On balance, however, it does not lead me to change my view as to what is more likely to have occurred at the initial interview.

1. I have therefore concluded that it is more probable than not that Ms Hughes stated in the course of the interview to Mr Paskalidis that there would be a one month trial period.

1. I have not taken into account in reaching that finding various matters which the counsel for the applicant failed to put to the respondent’s witnesses in relation to other matters which were dealt with in the evidence in connection with performance. Had I drawn any inferences from those failures I would have been even less likely to have preferred the evidence of Mr Paskalidis to that of Ms Hughes.

1. On the basis that Ms Hughes stated at the interview that the one month trial period would apply, I find that there was a period of probation fixed in advance as is required by regulation 30B(1)(c) of the Act.

1. In the circumstances and given the nature of the employment, and in particular given the gaps in the applicant's experience in many of the crucial areas, it seems to me that a one month probation period would be a reasonable probation period in this particular case.

Conclusion

1. Accordingly, I find that regulation 30B applies, and that the unlawful termination provisions of the Act are therefore not available to the applicant.

1. On that basis I will order that the application be dismissed.

Costs

1. Having heard my reasons for decision to this point, Counsel for the respondent has applied for an order for costs.

1. It seems to me quite arguable that if I held with sufficient certainty the view that an applicant had initiated or continued proceedings in this Court in bad faith, by which I mean in circumstances where he or she knew at the time of application or it was brought to his or her attention at some later stage in the proceedings that the true facts did not give rise to a proper claim under the Act, then an order for costs should flow.

1. In this matter I have, on the balance of probabilities, preferred the evidence of Ms Hughes over that of the applicant on the crucial question of what was said in the course of the final interview. I have not conclusively reached a view as to the honesty or otherwise of the applicant. I can only make my determinations on the basis of the evidence before me.

1. This is not a case where I am sufficiently convinced that the application was initiated or continued in bad faith to order costs against the applicant. I will therefore dismiss that application for costs. The application for costs was not, however, inappropriate.

I certify that this and the preceding (9) pages
are a true copy of the reasons for decision of
Judicial Registrar R.D. Farrell.

Associate:
Dated:            16 October 1996

APPEARANCES

Counsel appearing for the applicant:          Mr D. Anthony

Solicitors for the applicant:  Katsis Purcell Anthony        

Counsel appearing for the respondent:      Mr Martin

Solicitors for the respondent:  Jeffery Willetts and Associates

Dates of Hearing:  25 September 1996

Date of Judgment:  25 September 1996