Regan, Carol Anne v Lounge Suite Warehouse

[1997] FCA 566

CATCHWORDS

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - UNLAWFUL TERMINATION - VALID REASON

Workplace Relations Act s 170DC

CAROL ANNE REGAN -v- LOUNGE SUITE WAREHOUSE PTY LTD
(ACN 003 272 240)

No. NI 2043  of 1996

CORAM:          WILCOX J
PLACE:          SYDNEY
DATE:     5 June 1997  

IN THE FEDERAL COURT OF AUSTRALIA)     No. NI. 2043 of 1996
NEW SOUTH WALES DISTRICT REGISTRY )
GENERAL DIVISION                 )

BETWEEN:   CAROL ANNE REGAN

Applicant

AND:       LOUNGE SUITE WAREHOUSE PTY

LIMITED

Respondent

CORAM:          WILCOX CJ
PLACE:          SYDNEY

DATE:     5 JUNE 1997

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The application for review be dismissed.

NOTE: Settlement and entry of orders is dealt with in Order 38 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA)

NEW SOUTH WALES DISTRICT REGISTRY) No. NI. 2043 of 1996
GENERAL DIVISION                )

BETWEEN:  CAROL ANNE REGAN

Applicant

AND:     LOUNGE SUITE WAREHOUSE PTY  LIMITED

Respondent

CORAM:     WILCOX J

PLACE:     SYDNEY

DATE:      5 JUNE 1997

EXTEMPORE REASONS FOR JUDGMENT

WILCOX J: In my view the Judicial Registrar got this case right.

The Judicial Registrar’s findings are not binding on me. Sometimes I do not even read the Judicial Registrar’s reasons for judgment; but in this case it was agreed that a great deal of the Judicial Registrar’s findings were accurate and counsel helpfully took me through the reasons and indicated where there was a challenge to a finding.

The critical question is why Mrs Regan’s employment was terminated. Mr Jaramis conceded he did not terminate her on the ground that she had been dishonest. This was proper; it seems to me there would be no basis whatever for imputing dishonesty to her. The only possible basis for suggesting dishonesty would be if one constructed a theory that she had removed from under the fax machine, and from the store, the money Mr Beh had received from Mr and Mrs Dadd, and then, when a hue and cry occurred some weeks later, brought an equivalent amount of money back into the store and put it in the drawer. As she was off work on workers’ compensation at the time, the theory has to include the proposition that she came in after hours to place the money in the drawer. The theory would be substantially dependent on a view that there was a difference between the denomination of the notes received from Mr and Mrs Dadd and those found in the drawer.

If Mrs Regan was going to do this, I would have thought she would have taken the trouble to bring back notes of the same denominations. More basically, the entire exercise would have been an incredibly stupid thing for Mrs Regan to have done. Mr and Mrs Dadd would have been able to vouch for the fact she knew the thousand dollars in cash had been placed under the fax machine. As only Mr Beh and herself were on duty in the store at the time, suspicion would inevitably have fallen on her. I see no reason to believe that Mrs Regan would have been so stupid as to take the money out of the store and bring it back under the circumstances alleged. Moreover, leaving aside stupidity, such actions would have been inconsistent with her reputation as a responsible and honest person: it seems she was so regarded by everybody with whom she had contact.

Mr Jaramis apparently based his termination decision on his conclusion that Mrs Regan put the money in the drawer to “set up” Mr Beh. I do not think the evidence supports that conclusion. I do not think Ms Regan put the money in the drawer as a way of embarrassing Mr Beh or getting him into trouble with his superiors. I think she put it in the drawer because Mrs Dadd had pointed out to her that, in the place it had been left by Mr Beh, it was susceptible of being stolen by somebody. Mrs Dadd’s comment confirms Mrs Regan’s claim that, left under the fax machine, the money was in a position from which a customer, wandering around the store, could have taken it. There were apparently only two staff on duty at the time and there were a number of customers moving about.

I think Mrs Regan put the money in the drawer for safe keeping. It is true it was her job to bank the store’s receipts. But the accepted procedure was that the person responsible for making a sale had to do the necessary paperwork and put the money in the till. If Mrs Regan had banked the money without the paperwork having been done, this would have been an irregularity that could have caused difficulty.

Mrs Regan put the money in the drawer. She may have forgotten that it was there, for a time. When she remembered, she may have decided to let Mr Beh be embarrassed for a while, because the problem was caused by his sloppiness. If Mrs Regan did take that attitude, her conduct has to be considered against the fact that she was unhappy with the way she had been treated by Mr Beh. Mr Beh denies mistreatment, but the fact that Mrs Regan complained to other employees suggests that incidents had occurred. She was certainly (and justifiably) critical of the way he failed to follow proper procedures, particularly in regard to the handling of the money. Mr Jaramis himself indicated he was unhappy about Mr Beh’s conduct in that regard.

I think Mrs Regan may have decided to teach Mr Beh a lesson, by letting him search for the money and be embarrassed when it was found. Unfortunately, she went off on workers’ compensation before the hue and cry set in. She was not there when the financial controller came to look for the money.

The financial controller looked in the drawers, but did not make a thorough search. Mr Beh says he made a thorough search on 18 May, when suspicion fell on him. He described the search today. Perhaps he did make a more comprehensive search than the financial controller. But it should be remembered that Mr Beh did not know the money was in the drawer. One’s everyday experience is that a search tends to be more thorough if the searcher is convinced the item is to be found in the place of search, rather than if the searcher is simply canvassing possibilities.

It is true that Mrs Regan could have told Mr Jaramis on Sunday, 18 May, that she had put the money in the drawer; apparently she had remembered by then. Her explanation for not doing so is that he would have told Mr Beh and, if Mr Beh took the money out of the drawer before she could be there, she would be left, to use her words, “without a leg to stand on”. I can understand her taking that view, particularly if, by then, she was developing a mild paranoia about the way she had been treated. I do not say her attitude was a laudable one, but it is understandable. The important thing is that on the following morning she went to the store, and to the drawer, and immediately discovered the money where she said she had put it, at the back of the drawer, under some papers. I see no reason to doubt the truth of what Mrs Regan says, that the money was there all the time.

I think the incident was badly handled by everybody. Mrs Regan reacted excessively to what she saw as stress placed upon her by Mr Beh. Mr Beh seems to have been extremely sloppy in the way he handled this transaction, even on his own account of the matter given in evidence today. Judging by the evidence of other people, he was sloppy in respect of other transactions as well. Although I have some sympathy with Mr Jaramis, being put in a situation of friction between two employees, with every respect to him I think it must be said he did not handle the matter very well, either.

An employer faced with a problem of obvious conflict between two employees needs to take steps, either personally or through a senior employee, to find out what is happening between them, what is the cause of the personal friction, and to try and make it good.  If it could not be made good, he or she must take steps to ensure they would not have such a degree of future contact as would be likely to continue the problem. Mr Jaramis did not do any of this.

Mrs Regan thought she was dismissed because Mr Jaramis formed the opinion she had stolen the money. Mr Jaramis says that was not the reason; he thought she had “set up Mr Beh”. The case illustrates the importance of an employer thinking out exactly why he or she is contemplating the dismissal of an employee, and making the reason for the proposed action quite clear to the employee. I agree with the Judicial Registrar that, in this case, the requirements of S 170DC of the Industrial Relations Act were not complied with.

In addition, I do not think the employer has shown a valid reason for the termination. I agree with everything the Judicial Registrar said in her reasons on this point, notwithstanding we now have the evidence of Mr Beh. I do not think his evidence affects anything in the Judicial Registrar’s reasons.

As to the quantum of compensation, the amount awarded was equal to six months salary. This is the maximum permissible award under the Act. The evidence is that Mrs Regan was out of work continuously until the date of giving evidence before the Judicial Registrar, nine months after termination. I do not know what has been the position since then. But, even on that evidence, I cannot see any basis for saying the award was excessive. I would make the same order in relation to compensation. In my view the application for review should be dismissed. I do not make any orders as to costs.

I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox.

Associate:

Dated:     5 June 1997

APPEARANCES

Counsel for the Applicant:             A LoSurdo

Solicitor for the Applicant:           Whiteley, Ironside &

Shillington

Counsel for the Respondent:            F Laws

Solicitor for the Respondent:                JA Meagher & DeCoek

Date of Hearing:  5 June 1997