Brett Mains and Tetron International Pty Limited [1995] IRCA 91

INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 2226 of 1994 B E T W E E N : BRETT MAINS Applicant AND TETRON INTERNATIONAL PTY LIMITED Respondent Before: Judicial Registrar Chancellor Place: Melbourne Date: 3 March 1995 REASONS FOR DECISION (EX-TEMPORE REVISED FROM TRANSCRIPT) This is an application pursuant to section 170EA of the Industrial Relations Act by Brett Mains in relation to the termination of his employment with Tetron International Pty Limited on 31 October 1994. The Applicant commenced employment as a sales person with the Respondent on 30 September 1994. He had sales experience with a number of companies and for the two years immediately prior to commencing employment he had run his own business called Ideal Frames. The business involved selling photo frames primarily to a chain of one hour photo labs. The Respondent was involved in wholesaling of giftware products including lamps, dolls and photo frames. The Applicant attended two job interviews before commencing employment; the first on 26 September with Mr Minas Grapsas, the managing director of the Respondent, and the second on 28 September with Mr M Grapsas, Mr John Grapsas who was the national sales manager and one sales person. Mr Minas Grapsas was concerned about a potential conflict of interest because of the Applicant's photo frame business. The Applicant agreed in cross-examination that it was made clear to him that he would have to cease all prior business operations, in particular selling photo frames, as a condition of obtaining employment. The Applicant further agreed in cross-examination that he told Mr Grapsas that he needed a few days to close his business down. Mr Grapsas made a note at the time of the interview to the effect that the Applicant told him that he had $5000 of remaining stock and that he would be able to get rid of it within a few days so he would be able to start work with the Respondent. The Applicant denied saying that he had $5000 stock and said he had no recollection of saying he could get rid of it within a few days. Both Mr Minas Grapsas and Mr John Grapsas gave evidence that on the Friday he commenced work, the Applicant was asked whether he had finished selling the stock and the Applicant replied that he had. The Applicant gave evidence that he did not recall such a conversation. I find that it was a condition of his obtaining employment that the Applicant cease his business and cease selling photo frames. I am sure that the Applicant understood that to be the case, and that is why he informed Mr Grapsas that he had sold all the stock on the day he commenced employment. The Applicant signed an employment contract dated 30 September 1994. It contained the following two terms: Period of Contract: From 30 September 1994 to 30 March 1995. Termination of Employment: Both employee and employer can terminate employment without giving any notice. The Respondent argued that this was "a contract of employment for a specified period of time" pursuant to regulation 30B of the Industrial Relations Regulations and that the Applicant was excluded from the protection of Division 3 of Part VIA of the Act. The Respondent argued that the termination of employment clause merely restated what can occur in relation to any employment contract and was not of any particular significance. I reject that submission and adopting the reasoning of Von Doussa J in Anderson v Umbakumba Community Council and Northrop J in Cooper v Darwin Rugby League Inc. I find that where the contract is for a fixed period but can be terminated before the expiration of that period by either party then the contract is not one for a specified period of time within the meaning of regulation 30B. The Applicant worked as an on-the-road salesman both in metropolitan and country Victoria. He was required to fill out a daily report sheet which detailed the kilometres travelled, the clients attended, their addresses, remarks about the attendances and particulars of sales made. The Applicant spent his first week in western Victoria. On Monday, 10 October, he worked in the Glenroy/Broadmeadows and Fawkner areas. The Applicant travelled some 65 kilometres for the day and this was challenged by Mr Grapsas at the end of the day during his normal check of the report sheets. Mr Grapsas knew that salesmen working the area usually did significantly less kilometres and warned the Applicant not to do it again. The Applicant was unable to provide an explanation either to Mr Grapsas on the day or to the court during this hearing. On Tuesday, 11 October, the Applicant worked in the Carlton/Brunswick/Fitzroy and Clifton Hill area. He had been given specific instructions by Mr Grapsas to work in another area but because he had not made a sale the previous day, the Applicant ignored the instruction and went his own way. At the end of the day, the Applicant was again challenged. He had travelled at least 43 kilometres and perhaps as many as 61 kilometres which Mr Grapsas considered excessive. The Applicant had a haircut during his lunch break and Mr Grapsas warned him not to have a haircut on Mr Grapsas' time. Mr Grapsas warned the Applicant over the excess kilometres and expressed concern that the Applicant may have been doing some of his own work. There was a further query in relation to the kilometres travelled on 14 October. Mr Grapsas went overseas from Sunday, 16 October to Wednesday, 21 October. On the Saturday after his return, he checked the Applicant's daily report sheets for the previous two weeks. He found a kilometre discrepancy on 19 October, but later found after the Applicant's termination that the Applicant had not used the car on that day. There was a major discrepancy on 24 October when the Applicant travelled to Bendigo. He travelled 312 kilometres when perhaps 160 kilometres would be the maximum expected. The Applicant was unable to give any explanation for this discrepancy during the course of this hearing. Mr Grapsas also felt that the Applicant had travelled excess kilometres when travelling from Bendigo to Mildura the following day, but he had made a miscalculation and the Applicant was able to justify the kilometres travelled. By Saturday, 29 October, Mr Grapsas was becoming concerned that the Applicant may have been doing some work of his own during the Respondent's time. His suspicions were further confirmed during the weekend when some items of the Applicant's were found in the company car which the Applicant has used in the previous week. These items included a cheque book and an invoice from Mornington Latent Images to Ideal Frames dated 17 October 1994 relating to the supply of photo frames to the Applicant in the name of his prior company. The Applicant realised over the weekend that he had misplaced the cheque book, invoice and some statements. On Monday, 30 October, he got the car keys from Mr Grapsas and searched the company car. He did not find anything but when he returned to the office, Mr Grapsas was waving the cheque book and documents above his head. There is a major conflict in the evidence of Mr Grapsas and the Applicant as to what occurred in the following minutes. Mr Grapsas gave evidence in the following terms: The Applicant was red in the face and upset. He asked the Applicant if he had lost anything. He said to the Applicant: "When you come back tonight, we have to discuss. If no explanation is given, I may have to dismiss you." He said the Applicant replied: "Finish me now. Give me my pay now." Mr Grapsas agreed in cross-examination that the Applicant told him that the statements were accounts outstanding that needed to be paid and that he took the cheque book and statements with him to pay the bills. Mr Grapsas denied that the Applicant asked him to call Mornington Latent Images to confirm that the order had been lodged before he commenced employment and that the order could not be stopped and so delivery had to be made in October. The Applicant gave evidence in the following terms: He was asked by Mr Grapsas to explain the cheque book and documents and told him that he did paperwork while in the country at night to pay his former suppliers. He told Mr Grapsas that he had ordered the Mornington frames before commencing employment and due to delays they had only been supplied in October. He said he asked Mr Grapsas to ring Mornington. He said Mr Grapsas said to him: "I'm going to let you go at the end of the day." The Applicant said he replied: "Fire me now and stop mucking around." The Applicant agreed that he blew up as he was very angry and upset. In essence, the Respondent's case is that the Applicant resigned when he knew the game was up, that is, he was caught continuing to work in his own business contrary to his undertakings and elected to resign. The Applicant argued that without giving him any chance to provide an explanation, Mr Grapsas dismissed him as at the end of that working day. In assessing the credit of the two witnesses, I note that the Applicant made several admissions during the course of cross-examination. He agreed that he had sold photo frames at markets, generally Wantirna, on each Sunday during the time he was employed by the Respondent. He also admitted that on at least two occasions he had sold photo frames at his own home on nights after work. He said that this was leftover stock from his previous business although he conceded getting the Mornington stock on or near 17 October. During the course of his evidence, the Applicant gave a number of explanations for his continuing sales activities. He said that he had only agreed to stop his wholesaling business but that he had not mentioned selling; he said that he was free to do what he wished outside the 9 to 5 hours he worked for Grapsas; he said his photo frames were of different style and quality to those sold by the Respondent; he said that he sold in the outer eastern suburbs, a long way from the Respondent's market; he said he had to get rid of his remaining stock. I find all of these explanations to be unacceptable. Given the undertakings the Applicant gave Mr Grapsas on the commencement of his employment and his assertion that he had cleared all of his stock, I find that there was a fundamental breach of the contract of employment and a breach of the Applicant's duty of good faith to his employer which would have justified summary dismissal when it became known. In my opinion, these actions reflect very poorly indeed on the Applicant's credit. Although the Applicant had let his business name expire and had cancelled his sales tax registration, he had continued to sell photo frames. Further, the Applicant said in evidence that he had told Mr John Grapsas of his market selling activities. Mr John Grapsas denied the conversation and given his involvement in the pre-employment interviews and the fact that he did not pass on any such information to his father, I accept that the conversation did not occur. This is a further adverse finding in relation to the Applicant's credit. In the circumstances, I prefer Mr Grapsas' evidence as to the events of 30 October 1994. I find that the Applicant was not terminated by an act of the employer but chose to resign from his employment, admittedly in a highly emotional state, when he knew that the Respondent had become aware of at least some of his activities. I do not accept that this was a "resign or be sacked" situation and I reject the proposition that there has been a constructive dismissal of the Applicant. I therefore order that the application be dismissed. MINUTES OF ORDERS THE COURT ORDERS AND DECLARES: 1. That the application be dismissed. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules. I certify that this and the preceding six (6) pages are a true copy of the reasons for judgment of Judicial Registrar Chancellor. Associate: Dated: 3 March 1995 Applicant in person Solicitor for the Respondent: Mr G Katz, Messrs Price Brent Date of hearing: 1 March 1995 Date of judgment: 3 March 1994