Richard John Garrard v Nagambie Rowing Club Inc
[1994] IRCA 175
•23 January 1995
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA VI 567 of 1994
VICTORIA DISTRICT REGISTRY
B E T W E E N
RICHARD JOHN GARRARD
Applicant
A N D
NAGAMBIE ROWING CLUB INC.
Respondent
Reasons for Judgment
23 January 1995 PARKINSON JR
This is an application pursuant to S170EA of the Industrial Relations Act 1988 (“the Act”). The applicant seeks:
(a) an order pursuant to s.170EA of the Act that the applicant be permitted to make the application on the date of its filing
notwithstanding the expiration of the period specified in s.170EA(3)(a);
(b) an order declaring the termination of the applicant’s employment to have contravened Division 3 of Part VIA of the Act;
(c) an order requiring the respondent to reinstate the applicant in employment;
(d) an order that the respondent pay compensation to the applicant.
No matters were put before me to suggest that I ought not exercise my discretion to extend the time for filing the application. The time will be extended.
The proceeding occupied four sitting days and the following persons were called to give evidence in the matter:
Richard John Garrard - the applicant
Rachael McPherson - liquor and gaming employee
Alan Geoffrey Morgan - accountant called by the applicant
Neil Robert Clarke - accountant called by the respondent
Judy Finnegan - member of the committee of management
Francis Deane - licensed venue operator and committee of management member
The applicant was employed by the Nagambie Rowing Club Inc. on
24 October, 1993 and his employment was terminated on 2 May, 1994.
The duties carried out by the applicant were those of Club Manager.
The applicant has a long history of involvement with the sport of rowing, both participating and coaching on a state and national basis.
The respondent is an association incorporated pursuant to relevant Victorian legislation, and is a sporting club established for the benefit of its members. One of its aims is to promote the sport of rowing and to encourage the development of participants in the sport. It has operated for many years and at a social level trades in liquor and food sales, particularly during peak holiday periods such as Christmas and Easter.
Background and findings of fact
In 1992 the respondent club applied for and was granted a gaming licence and was authorised to install five gaming machines. At this time the social activities of the club were operated by the members of the committee of the club on both a voluntary and sometimes paid basis, with some assistance from casual hourly labour during peak times. In 1993 the respondent applied for and was granted a licence to install an additional 25 gaming machines. This took the total of machines installed to 30.
The applicant was approached by Mr Pat McNamara in February 1993 and later in May, 1993 by Mr Neil Lodding, both of whom were members of the committee of management of the club, and asked whether he would be interested in a position as club manager. He indicated that he would be interested and was invited to apply for the position by submitting his application and resume when the position was advertised. He submitted a letter of application including a resume and business plan on 4 October, 1993 (Exhibit G10 Document 1). At about this time he also enrolled in the requisite course for obtaining a gaming employees licence and obtained on 21 October, 1993, his Special Employees Licence pursuant to the Gaming Machine Control Act 1991 (Vic). He was interviewed by the committee of management for the position on 24 October, 1993 and, being the preferred candidate of the committee, the further negotiation of his employment including terms and conditions was delegated by the committee to three members of the committee. I am satisfied that he was employed on 24 October, 1993, with a commencement date of 1 November, 1993 being set.
To take up the position with the respondent it was necessary for the applicant who resided in Torquay, Victoria to relocate himself to Nagambie and find suitable accommodation at that location. This he did between 24 October and 1 November, 1993.
There is some dispute as to the terms of the contract of employment at commencement and there is some ambiguity within the minutes of the committee meeting of 24 October, 1993 (Exhibit G10 Document 16A) which record the terms discussed by the committee at that time. I am however satisfied that the employment was formally offered by the respondent and accepted by the applicant on 24 October, 1993 and that the commencement date agreed to between the parties was 1 November, 1993. Further, the applicant did in fact commence his duties at the rowing club premises on 1 November, 1993.
There were subsequent negotiations as to the terms and conditions of employment, however I am satisfied that by 1 November 1993 the applicant was employed on a salary of $32,000.00 per annum with incentives of some kind in relation to gaming profit and bar sales.
The applicant contends that the incentives were based upon gaming revenue of the club of 25 per cent of the amount of revenue which exceeded $75,000 per quarter. The respondent contends that this incentive was based upon 25 per cent of profit from gaming above $300,000.00 per annum, payable on a quarterly basis, and 25 per cent of profit from bar sales, subject to a minimum amount of sales (Exhibit G10 Document 16A). There is also a fundamental disagreement between the parties as to whether or not this incentive was to apply in the period of the first three months of employment. On any view of the evidence there is clearly a documented difference between the parties in this regard at the very commencement of the employment (Exhibit G10 Document 3 and Exhibit G10 Document 16A). I am not satisfied that there was agreement between the parties as to the nature of the incentives to be paid. I am further not satisfied on balance that any such incentives were to be paid during the initial three month employment period.
There appears to have been a number of attempts during the course of the employment to vary the conditions of employment but I am not satisfied that those variations were ever effected by the parties.
On 1 November, 1993 a written agreement was purported to be executed on behalf of the respondent by Mr Francis Deane and signed on behalf of a company which was yet to be incorporated by the applicant. The evidence was that this company was in the event never incorporated. This agreement purported to be a labour supply contract between a yet to be incorporated company and the respondent. The terms and conditions under which the hire of the applicant’s labour was to occur were set out in this agreement.
There was dispute between the committee and the applicant as to the terms of the contract of employment. This dispute arose in relation to the terms upon which any bonus or incentive might be paid and the amount of salary payable. There was also concern expressed as to the personal liability of Mr Deane under the contract executed on 1 November, 1993 (Exhibit G10 Document 3).
Two further contract documents were subsequently drawn with a view to resolving the difficulties between the parties during late November, 1993. The terms of these contracts were never signed by the parties.
The purported contract of the 1 November, 1993 contains conditions which are substantially the same as those contained in the minutes of the meeting of the committee of management on 24 October, 1993 and is relied upon by the applicant as evidencing the terms of the employment agreement to be implied. I am satisfied that these are the appropriate terms of remuneration to be implied.
Within two weeks of the applicant’s appointment a dispute arose within the committee of the respondent as to the terms and conditions of the employment of the applicant and even as to his actual commencement in the position. This dispute was generated internally to the committee of management and is apparent from the minutes of the respondent club dated 14, 22, 27, 29 November, and 13 December, 1993 (Exhibit G10).
It appears that there was never a consensus amongst the members of the committee as to the role of the employee manager, his proposed responsibilities or duties, or his conditions of employment. None of these matters had been given any serious attention prior to the engagement of the applicant. The applicant continued to work in the position of manager for at least six weeks prior to the committee finally determining what his incentives and conditions should be.
This occurred on or about 13 December, 1993, although no written contract was even then produced by the committee and no agreement as those terms seems to have been received from the applicant.
The applicant continued to work as club manager during the entire period and, whilst the committee of management did not formally resolve to appoint him as manager, its conduct during the entire period including its dealings with the applicant as manager of the club are sufficient to satisfy me that the applicant was in fact so employed.
During this period of time however there was no finalisation of clear guidelines or instructions as to the duties and responsibilities of the applicant as club manager. In particular this related to the issue of the terms of employment such as salary, commission and length of engagement. However it is clear that there was contained in the original contract discussed earlier herein terms as to autonomy of management of the club. Whilst these terms were not endorsed by the committee of management, it is apparent that these are the terms that the applicant relied upon when commencing the employment and terms about which no objection was taken by the committee of management in future negotiations until a further set of recommendations was provided to the committee meeting on 27 November, 1993 (Exhibit G10 Document 24). Even these terms were to be the subject of further negotiation.
Whatever determination might have been made as to the actual terms of the contract, in this regard it is apparent that there was no clear set of directions as to the manner in which the applicant was to perform his duties as club manager. I am satisfied that the applicant commenced the position with an understanding as to the extent of his role and responsibility which had been clearly stated by him to the respondent, and that it was the committee of management which failed to inform the applicant at an appropriate time prior to commencement of the employment of the limits upon his authority and responsibilities.
During the period of the applicant’s employment the club’s social and sporting activities, including the expanded gaming operations, continued to be jointly managed by the committee of management. The treasurer of the respondent continued to play a direct and hands-on role in relation to the retention of the business records of the club, including accounts and cheque functions.
It is apparent that the club committee, or some of its members, viewed the gaming and liquor activities as social activities inextricably linked to the sporting club. Others, including the applicant, viewed the liquor and gaming activities as a business operation requiring independent management, separate from the sporting activities of the club.
It appears to me that the fundamental and unresolvable problem between the applicant and the majority of the members of the committee of management of the club arose from this difference of view of the respondent’s operations. Some committee members took the view that they continued to have a hands-on role on a day to day basis in the management of the club, whilst the applicant, having been employed as the club manager, took the view that he was entitled to be left alone to manage the club without interference from honorary officials. This latter attitude in my view was at the heart of the difficulties between the applicant and the respondent.
Upon commencing employment the applicant involved himself in the expansion of the clubs operations, including preparation of extensive publicity material (Exhibit G2) and initiating capital works. This was consistent with the business plan he had submitted to the respondent with his resume prior to taking up the employment. I accept the applicant’s evidence that he worked extremely long hours, including split shifts, and whilst he had lengthy breaks at various times during the day to supervise rowing training activities or for his own rowing training, I am satisfied that these breaks were always anticipated by the respondent as part of the employment agreement. Indeed the applicant’s rowing activities were in my view partly instrumental in the respondent selecting him for the employment.
In effect the applicant worked from early morning until late into the next morning when the club closed for business. There was criticism of the applicant’s activity of occasionally clearing coin from the gaming machines whilst customers were still present in the evening or early hours of the morning but, having regard to his hours of attendance and the hours of trading of the club, I find this is an unreasonable criticism. I find that these matters were not at any time the subject of any direction by the committee of management to the applicant and that this conduct did not constitute work performance of such a nature as would form any part of a valid reason for termination of employment.
The financial management of the Club.
It was contended by the respondent that the applicant mismanaged the financial affairs of the club and that he took it from being a thriving profitable club to one bordering on financial difficulties.
Evidence was called from the club’s accountant Mr Neil Clarke and from an accountant, Mr Alan Morgan, who was retained by the applicant’s solicitors, for the purposes of providing a report on the affairs of the club. Reports were written by both accountants and relied upon in the proceedings. Having regard to there being some conflict between the conclusions of these two witnesses, it is necessary for me to decide which expert evidence is to be preferred.
The evidence was that there was a history of interaction during the course of the employment between Mr Clarke and the applicant and a degree of tension in their relationship during this time. This tension is apparent in the correspondence to the committee member Mrs Darbyshire (Exhibit C1) from Mr Clarke, and in the reports (Exhibit C2 and C3) tendered in these proceedings. It was also apparent from the evidence given by Mr Clarke.
I note also that Mr Clarke was a participant in the process which led to the termination of the employment of the applicant, which included attending a meeting of the committee of management on 21 February, 1994 where, in the absence of the applicant, his work performance in general was discussed and a motion moved to terminate his employment. ( Exhibit G10 Document 41) I therefore have some difficulty with the independence of Mr Clarke’s expert evidence.
I note that there was not a great deal of difference between Mr Clarke and Mr Morgan in terms of the actual figures. The critical difference between them was rather in the interpretation to be placed upon the amounts, including matters such as what would be reasonable growth expectations in the period of employment. These are matters which call for the exercise of opinion albeit expert, and having regard to my earlier reservations regarding Mr Clarke’s evidence, I prefer the evidence of Mr Morgan (Exhibit G9). His evidence was that, having regard to the level of expansion of the business during the relevant period and the associated costs and expenses, the profit level of the business was reasonable and growth was at a level to be expected. Further, the correspondence from Tattersall’s General Manager, Mr Gillooly (Exhibit G10 Document 59), to whom the respondent was in some respects financially accountable in respect of gaming profits, supported this view of the financial position of the respondent. I accept that this was the case.
I find that the applicant did not mismanage the financial affairs of the respondent nor did his conduct jeopardise the financial viability or future operations of the respondent. I find that the criticisms of the applicant’s financial management of the club were unfair and that this matter did not provide valid reason relating to the work performance of the applicant for the termination of his employment.
The events and incidents leading to the termination of employment.
It is apparent that by early February, 1994 the majority of the members of the committee of management had decided to terminate the applicant’s employment. I am satisfied that this occurred fundamentally because of the differences in attitude to the management responsibilities of the applicant referred to earlier, and also because of the financial issues discussed earlier herein, in particular expectations of greater net profit as a result of gaming than those realised. Included also in this latter aspect were issues arising out of the applicant’s decision on 9 November, 1993 not to continue hiring members of the committee as employees of the club; increased labour costs due to hiring staff at award rates of pay, and increased expenditure on items of capital expense. I have no doubt that a great deal of antagonism developed between the applicant and a number of members of the committee as a result of these matters. Some committee members were also critical of his dress style and methods of supervision of staff. In relation to these latter matters, I am not satisfied that they were correct or valid criticisms.
Whilst I am satisfied from the evidence, particularly that of Mrs Finnegan, that there was a fundamental communication difficulty between a number of members of the committee and the applicant, and that the applicant did contribute to this problem in some respects, I find that the manner in which the applicant had been dealt with by the committee of management also contributed to this difficulty in communication and may well have been the catalyst for it. I am not satisfied that there was any inherent personality trait which made the applicant an unsuitable person to employ or to remain in such a position.
The matters discussed herein ultimately resulted in some of the members of the committee taking a decision to terminate the applicant’s employment.
Between February, 1994 and May 1994 there were a number of instances where steps were taken by various committee members to effect such a termination. These included the moving of a motion of termination at a committee of management meeting on 21 February, 1994 (Exhibit G10 Document 41) and the sending of a letter to the Tatersalls General Manager, Mr Gillooly on 1 March, 1994 seeking his help in removing the applicant (Exhibit G11). I have referred earlier to Mr Gillooly’s response to this letter in Exhibit G10 Document 59.
During this period of time however there were no steps taken by the respondent to establish clear guidelines as to the duties and responsibilities of the applicant as club manager, nor to formally bring to his attention any of the matters of concern as to his work performance.
I have earlier in this decision made findings in relation to the applicant’s performance of his duties as club manager and in particular in managing the financial affairs of the club. I am not satisfied having regard to my findings as to the applicant’s work performance that the respondent had a valid reason for the termination of the applicant’s employment connected with the applicant’s capacity or conduct. I find that the respondent in terminating the employment of the applicant contravened S170DE of the Act.
S170DC
The applicant contends that in terminating his employment the respondent failed to give him an opportunity to be heard in relation to the allegations against his performance or conduct. The respondent alleges that it did give him such an opportunity and that this was during the course of the meetings of the committee of management between 16 March and 2 May, 1994, when he was provided with the opportunity to respond to the allegations made against him. The respondent contends that this was sufficient to comply with the requirements of the section.
I have real doubts that there could be any value in a process which was adopted only so as to be seen to have given the applicant a hearing rather than to in reality accord him such a hearing. In this matter the decision to terminate the applicant’s services had been made some time before by a number of the members of the committee of management and what was put in place by the committee of management was a process which, by appearing to comply with legislative or natural justice requirements, would achieve the desired outcome. Further, I am satisfied that the evidence reveals that the opportunity to be heard involved little attention being paid to the applicant’s explanations, this being evidenced by some members of the committee of management leaving the room in the middle of his explanations to the meeting on 18 April, 1994. On 2 May, 1994 his employment was terminated.
The observations of Chief Justice Wilcox in Nicolson v Heaven and Earth Gallery Pty. Ltd. (1994) 126 ALR 233 are of particular relevance in this matter. At page 243 his Honour said:
“The paragraph does not require any particular formality. But this
does not mean that it is unimportant or capable of perfunctory
satisfaction. Section 170DC carries into Australian labour law a fundamental component of the concept known to lawyers as “natural justice” or more recently “procedural fairness”. The relevant principle is that a person should not exercise legal power over another, to that person’s disadvantage and for a reason personal to him or her, without first affording the affected person an opportunity to present a case.... The principle is I believe well understood in the community. It represents part of what Australians call “a fair go”. In the context of S170DC, it is not to be treated lightly.”
Further at page 243 - 244 his Honour says:
“ For S170DC (a) to be satisfied, it would have been necessary for the
respondent to determine what aspects of Mr Nicolson’s conduct or
performance were such as to justify possible dismissal and put those
matters squarely to him, under circumstances where he had a fair
opportunity to defend himself ”.
I find that the respondent failed to accord the applicant an opportunity to be heard in compliance with the provisions of S170DC(1) of the Industrial Relations Act 1988.
It should be further noted that, had I found that the respondent had a valid reason for the termination, the manner in which the procedural aspects of the termination were handled by the respondent and in particular the failure to accord him an adequate opportunity to be heard, would have led me to find that the termination was harsh, unjust or unreasonable.
I turn now to consider the question of the remedies sought by the applicant.
Remedy - S170EE
This is a matter where I conclude that it would be impracticable to order the reinstatement of the applicant. In so deciding I have taken into account the fact that the applicant has relocated himself back to his original place of residence and that there is such animosity between many of the committee members of the club and the applicant that it would be impossible for a reasonable working relationship to be established such that the applicant would find it practicable to remain employed. Further the applicant does not seek reinstatement.
Compensation
In assessing the appropriate compensation to be ordered in this matter I have had regard to the likely length of continued employment. In so doing I have had regard to the terms of the written contracts which, whilst never properly executed, assist in ascertaining what was in the contemplation of the parties.
I am satisfied that the employment, absent the matters discussed herein, was likely to have continued for a further period of six months. In the circumstances of this matter I have decided to award the applicant the sum of $ 15,999.00 being a gross amount calculated by reference to 26 weeks of wages at $ 615.38 per week. Whilst I note that the applicant has received one months pay in lieu of notice, I see no reason in the circumstances to deduct this amount from the amount of compensation ordered.
Other aspects of the claim for remuneration
I am not satisfied on the material before me that there was an agreement wherein the respondent would pay rental upon the use of the applicant’s computer. This aspect of the claim for remuneration has not been made out.
A further claim was made in respect of remuneration owed arising from the contract terms in relation to payment of bonuses for gaming and bar targets. The applicant sought an amount of $5,115.81 as a debt owed. I have earlier found at page 5 of this decision that the terms relied upon to found this claim are not made out. I therefore refuse this aspect of the claim.
The orders of the court will be:
That the applicant is granted leave to file the application out of time. Time for filing is extended to 26th May, 1994.
That the respondent in terminating the employment of the applicant
contravened S170DC and S170DE of the Industrial Relations Act
1988.
That the respondent pay to the applicant the amount of $15,999.00.
in compensation. Such amount is payable within 21 days of the date
of this order.
I certify that this and the eighteen (18) preceding pages
are a true copy of the reasons for judgment of
Judicial Registrar Parkinson.
Associate:
Dated: 23 January 1995
Solicitors for the applicant: Lamb Cassidy
Counsel for the applicant: Mr N J Green
Solicitors for the Respondent: R V Theobold
Counsel for the Respondent: Mr M Carrazzo
Dates of hearing: 28 October, 11 and 21 November and 1 December 1994
Date of judgment: 23 January 1995
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