CATCHWORDS Industrial Law - employment - unlawful termination - whether applicants employed and if so on what terms - whether employment terminated by the employer - whether termination harsh unjust or unreasonable - no point of principle involved. Matter No. DI 104 of 1994 ANNETTE LOUISE JOHNSON v HALSMOREE PTY LTD Matter No. DI 105 of 1994 BRYANT GEORGE v HALSMOREE PTY LTD VON DOUSSA J DARWIN 31 MAY 1995 INDUSTRIAL RELATIONS COURT ) ) OF AUSTRALIA ) ) NORTHERN TERRITORY ) ) DISTRICT REGISTRY ) MATTER NO. DI 104 OF 1994 BETWEEN: ANNETTE LOUISE JOHNSON Applicant AND: HALSMOREE PTY LTD Respondent MINUTES OF ORDER JUDGE MAKING ORDER : VON DOUSSA J PLACE ORDER MADE : DARWIN DATE ORDER MADE : 31 MAY 1995 THE COURT ORDERS THAT: 1. Declaration that the employment of the applicant with the respondent was terminated on 8 April 1994 by the respondent in contravention of the provisions of Division 3 of Part VIA of the Industrial Relations Act 1988. 2. The respondent pay to the applicant the sum of $19,000. Note: Settlement and entry of order are dealt with by Order 36 of the Industrial Relations Court Rules. INDUSTRIAL RELATIONS COURT ) ) OF AUSTRALIA ) ) NORTHERN TERRITORY ) ) DISTRICT REGISTRY ) MATTER NO. DI 105 OF 1994 BETWEEN: BRYANT GEORGE Applicant AND: HALSMOREE PTY LTD Respondent MINUTES OF ORDER JUDGE MAKING ORDER : VON DOUSSA J PLACE ORDER MADE : DARWIN DATE ORDER MADE : 31 MAY 1995 THE COURT ORDERS THAT: 1. Declaration that the employment of the applicant with the respondent was terminated on 8 April 1994 by the respondent in contravention of the provisions of Division 3 of Part VIA of the Industrial Relations Act 1988. 2. The respondent pay to the applicant the sum of $19,000. Note: Settlement and entry of order are dealt with by Order 36 of the Industrial Relations Court Rules. INDUSTRIAL RELATIONS COURT ) ) OF AUSTRALIA ) ) NORTHERN TERRITORY ) ) DISTRICT REGISTRY ) MATTER NO. DI 104 OF 1994 BETWEEN: ANNETTE LOUISE JOHNSON Applicant AND: HALSMOREE PTY LTD Respondent MATTER NO. DI 105 OF 1994 BETWEEN: BRYANT GEORGE Applicant AND: HALSMOREE PTY LTD Respondent Coram: von Doussa J Place: Darwin Date : 31 May 1995 REASONS FOR JUDGMENT It has been ordered that these two matters be heard together. The applicants seek declarations that their employment with the respondent was terminated on about 8 April 1994 in contravention of the provisions of Part VIA of the Industrial Relations Act 1988. They also seek compensation. The applicants have lived in a de facto relationship for many years. They allege that in March 1993 they were engaged by the respondent, in the case of Mr George as manager and in the case of Ms Johnson as assistant manager, of the Knotts Crossing Motel at Katherine. The respondent, a duly incorporated company, from 1 April 1993 became the occupier and operator of a tourist resort complex covering some 10 acres at Knotts Crossing which included a motel, a caravan park, a camping ground, and a kiosk. The officers of the respondent who played significant roles in the events under consideration are Mr John Robinson who acted as general manager of the whole complex and his wife Mrs Patricia Robinson, who has been described on occasions in the evidence as the "owner" of the business, but who in reality is one of three proprietors and directors of the respondent, the other two being investors unrelated to Mr and Mrs Robinson. It is alleged that the applicants were employed as manager and assistant manager only of the motel part of the complex, and were answerable in those roles to Mr Robinson. The applicants allege that they were engaged on terms that they would each receive $500 net after tax (tax to be paid by the respondent) plus free accommodation, power and food. It was their common understanding that they were engaged as a couple or "team" to manage and promote the motel. They say there was an event in August 1993 which altered the way in which the employment of Ms Johnson was carried out, but that she continued to be employed on the same terms. It is alleged that at all times until the termination, Ms Johnson received $500 clear per week. The applicants say they were dismissed by Mr Robinson on 8 April 1994 following an incident on 5 April 1994 when Mrs Robinson abused Mr George. Their dismissal, they allege, was harsh, unjust and unreasonable. They acknowledge that it would be impracticable for them to be reinstated as their positions have been otherwise filled and a working relationship between them and Mr and Mrs Robinson could not now be re-established. They therefore seek compensation under s.170EE(2) in the maximum amounts permitted, namely the amount that each of them would have received (including perquisites) in respect of the six months that immediately followed the day on which their dismissals took effect. The respondent denies liability. In the case of Mr George the respondent admits that he was employed as manager of the motel on the terms alleged, but denies that the respondent terminated his employment. It is alleged that he voluntarily resigned, probably because of the poor health of Ms Johnson. In the pleadings the respondent alleged that Mr George left the motel without giving sufficient notice thereby acting in breach of his contract of employment which caused loss and damage to the respondent. A cross-claim for damages was pleaded which invoked the accrued jurisdiction of the Court. That cross-claim required that the applications be heard by a judge. At the conclusion of the evidence in the case the cross-claim was withdrawn. In the case of Ms Johnson it is pleaded in the amended defence that whilst it was originally intended that she be employed on the terms alleged, this never happened; that she was employed only on a part-time casual basis from 27 April 1993 to 16 August 1993; and that on 16 August 1993 her employment was terminated. Whilst she continued to reside in the manager's accommodation at the motel after 16 August 1993 it is alleged that at no time was she employed by the respondent after that date. The respondent contends that these claims, and in particular the allegations made as to Ms Johnson's employment, reflect an artful and elaborate plan to bring baseless claims against the respondent, presumably put together in April 1994. The essential questions of fact that must be resolved are whether Ms Johnson was ever employed on the terms she alleges, if so whether her employment on those terms continued after 16 August 1993, and whether the employment of Mr George, (and if appropriate, Ms Johnson,) was terminated by the respondent on or about 8 April 1994. On these questions the applicants carry the burden of proof upon the balance of probabilities. In the event that it is held that the respondent terminated the employment of one or both applicants, the further question must be considered whether that termination was harsh, unjust or unreasonable; here the onus of proof is dealt with by s.170EDA. The applicants have each given evidence, and called four witnesses. Mr Medley produced a file relating to Ms Johnson maintained throughout (and either side of) the period March 1993 to April 1994 by the Commonwealth Rehabilitation Service ("the CRS"). Ms Buckeridge and Mr House were called to support the applicants' evidence that Ms Johnson continued to perform duties for the respondent after 16 August 1993. Ms Buckeridge had arranged a group booking at the motel in March 1994. Mr House was employed as the motel front office supervisor throughout the time that the applicants were at the motel. He also gave evidence supporting that of Mr George relating to events in April 1994. In addition he, and Mr Milliken, a clinical psychologist who was at the time treating Ms Johnson for depression and anxiety, gave evidence to refute a suggestion that the allegation that Mr George was "sacked" was invented by him some days after the event, and after he had obtained legal advice. For the respondent, Mr and Mrs Robinson have given evidence, along with Ms Laura McCoy who was engaged as a clerical assistant/secretary in the motel office in mid-February 1994, and Mr Radovich, the yardman and maintenance man at the motel. Each side has tendered a number of documents. The evidence of the applicants on the one hand and that of Mr and Mrs Robinson on the other, are in stark conflict on the essential questions in dispute. It is not possible, even with the assistance of the other evidence, to fit the conflicting stories together in a way that does not involve the outright rejection of central allegations in the evidence of one of these couples. To resolve the claims it is necessary to decide whether to accept the basic account either of the applicants or of Mr and Mrs Robinson. The making of that decision does not imply that the account accepted is correct in every point of detail, but the decision does involve the acceptance of the broad picture conveyed by that account. In my opinion the Court should accept the account which has been given by the applicants, and I outline my main reasons for reaching that conclusion. The Court is entitled to place weight on the demeanour and presentation of the witnesses, and on the consistency and probability of their evidence. On those matters I prefer the evidence of the applicants to that of Mr and Mrs Robinson. A sustained attack was mounted on the applicants' credit. Both applicants presently suffer psychological ill health. Mr George had the added strain whilst giving evidence of being charged with a stealing offence on a complaint that office property and records of the respondent had been unlawfully taken or retained by him when he left the motel. Ms Johnson, by reason of her ill health, has a memory problem. I have had regard to these matters. Whilst there are aspects of the applicants' evidence which have fairly been criticised by counsel for the respondents, I considered that the attacks on their credibility largely failed. Overall, I found the applicants' evidence far more persuasive than that of Mr and Mrs Robinson. It was suggested to the applicants, at least as I understood the thrust of their cross-examinations, that they had been guilty of conduct in relation to the social security system that so discredited them that their evidence should be rejected in favour of Mr and Mrs Robinson's evidence. That is not the view which I formed on their evidence. Rather, the attack was one that had two edges - and insofar as it inflicted wounds, it did so to both sides. The applicants' evidence, and notes in the CRS file of interviews and communications between CRS officers and the applicants, satisfy me that the applicants were confused as to many of their entitlements. However I have difficulty in accepting that they did not know that for Ms Johnson to receive a "cash" top up over and above a pension and a work training allowance to achieve $500 per week, as she alleges, would be contrary to the requirements of the relevant scheme applicable to her. On the other hand, Mr Robinson was himself familiar with the Job Start scheme, and apparently made his own enquiries about other benefits and subsidies to which the applicants would be entitled (an aspect of the applicants' evidence confirmed by the CRS file). The circumstances which led to Mr George not being treated by the respondent as its employee until a Job Start agreement was signed on 15 April 1993 provide grounds for seriously questioning the propriety of the conduct of Mr and Mrs Robinson in relation to the subsidy scheme. The respondent plainly benefited from the Job Start subsidy, and on the applicants' case also benefited substantially from the payments made to Ms Johnson. The full circumstances surrounding the payment of subsidies has not been investigated in these proceedings. Officers of the relevant departments who tendered advice to the parties have not given evidence. In these circumstances it is not possible to draw useful or reliable conclusions against either side on issues relating to social security payments, and I do not do so. Moreover, the view that one takes about the conduct of one side or the other on this topic largely depends on which evidence is accepted, and there would be a risk of circular reasoning if the evidence about social services and related payments were used to resolve the issue of credibility. In similar vein, I suspect that both the applicants and Mr and Mrs Robinson knew that Ms Johnson was working hours between April and August 1993 that considerably exceeded those anticipated or sanctioned by the rules governing her entitlement to the pension and subsidy she was receiving, but I do not think I should on this score prefer one side's evidence to the other. Apart from my impressions formed whilst the witnesses were giving their evidence, there are a number of matters that support the conclusion that the applicants' account should be accepted which I mention in the course of the following summary of the facts as I find them. I find that the applicants and Mr Robinson did discuss in Darwin in February 1993 the proposed terms on which the applicants were to be engaged in the event that the respondent acquired the Knotts Crossing complex. I think it is probable that the applicants disclosed to Mr Robinson not later than their discussion with him at the Travelodge in February 1993 that they had both been receiving social services for about one year, and that they believed they were entitled to subsidies to assist them in gaining re-employment. Mr Robinson informed the applicants that he would made enquiries about the subsidies that could be available, and asked them not to "interfere". He would make the arrangements. There are notes in the CRS file that make it fairly clear that the applicants did not disclose to Mr Robinson until Ms Johnson arrived in Katherine somewhere between 18 and 24 March 1993 that she had suffered a nervous breakdown in 1992, and that that had been the reason for the applicants' unemployment. Thereafter Mr Robinson did make enquiries and was closely involved through contact with the relevant departmental officers in Katherine in arranging for the payment of subsidies. The applicants' allegation that Ms Johnson, for the period from when she was first put on the respondent's wages book until 16 August 1993, was paid a "cash" top up over and above her disclosed wage and her disability pension and subsidy, to $500 per week, and that she was paid $500 per week cash outside the formal wages records of the company thereafter, is at first sight an improbable one. However when the evidence is considered the improbabilities dissipate. That it was anticipated that Mr George and Ms Johnson would each receive a wage of $500 net per week when their employment was first arranged is admitted in the defences. Mr George took up residence in the motel about four weeks before 1 April 1993, the day on which the operation of the motel was formally handed over to the respondent by the former owner. He familiarised himself with the operation ready to take over his managerial duties from 1 April 1993. From the time of his arrival Mr Robinson paid him $500 cash per week. It now appears from the wages records of the company that he was not recorded in them as an employee until 18 April 1993 when a Job Start agreement was signed. Mr Robinson explains the position by saying that Mr George was employed by him as a consultant until 18 April 1993. I accept Mr George's evidence that he was never told he was employed as a consultant by Mr Robinson. I think it is probable that he was not told what his status was before 1 April 1993, and thereafter that he assumed that he was employed on the terms offered in Darwin. How or why Mr Robinson should be paying cash on his own behalf, or how if at all the respondent accounted to him for that cash is not disclosed in the evidence. That these cash payments were made in circumstances designed to give the appearance of regularity in the records of the respondent to the receipt of a subsidy removes the improbability that other cash payments for a like purpose would be made. The applicants in their initial discussion with Mr Robinson spoke of them working as a "team" in implementing their proposals for the motel and its promotion. I am satisfied that it was understood by Mr Robinson then, and throughout the applicants' later dealings with him, that they were engaged as a team. Each of them had particular skills that were required: Mr George as a motel manager and Ms Johnson as a public relations and tour organiser. It is notable that no complaint is made in the respondents' case that the promotion of the motel, and the group booking arrangements made by Ms Johnson, were unsatisfactory whilst she was there, and the motel seems to have been very busy throughout that time. The applicants say that Ms Johnson started work virtually at the commencement of the respondents' takeover of the motel confirming group bookings that were then under threat. However the wage records that were under the control of Mrs Robinson do not record Ms Johnson as an employee until 27 April 1993 when a work training agreement was signed with the CRS. The evidence is vague about payments made to Ms Johnson before 27 April 1993 but from that date she alleges her wages were made up to $500 after giving credit for her disability pension, her training allowance, and her disclosed earnings of $94.48 net per week. This would produce a result that accorded with the anticipated proposal for the applicants' employment as a "team". The scheme for payment of Ms Johnson's wages described by the applicants had plain advantages to the respondent as it had to pay less to achieve the income to the applicants which the initial package proposed. From the end of April to June 1993 I am satisfied that Ms Johnson performed extensive duties as assistant manager. She was assisting in the office, managing group bookings with travel companies (which according to Mr House would occupy up to 24 hours per week at that time of the year) working several nights a week supervising the restaurant, and helping count the tills at the end of the day. Certainly her duties as performed were far beyond those recorded in the wages records. At the time she had her difficulties, and she was receiving support from the CRS case manager, but the nature of her condition does not mean that she was incapable of carrying out the tasks described in the evidence. In June, Ms Johnson had a relapse in her health, and withdrew for a time from the work place. She conceded that she was away for a few days, but the CRS file suggests that it may have been longer. It seems that she had stopped taking a prescribed medication, but upon returning to her drug regime she lost the symptoms which were causing concern to Mr Robinson and others. Again the evidence of the applicants is vague as to whether payments to her continued unaltered through this period. Ms Johnson said she was on sick leave. Whether this was ever discussed, and whether or not payments were adjusted is not now significant. By August Ms Johnson had recovered and had resumed her former duties. There was a further incident in early August 1993 when the applicants learned that Ms Johnson's pension and subsidy benefits had been stopped that could have precipitated a further onset of anxiety and depression, but the evidence of Mr Milliken suggests that Ms Johnson coped rather well with that event. Then came the "dismissal" of Ms Johnson on 16 August 1993. On the evening of Sunday 15 August 1993 the motel was very busy. The staff in the restaurant were under pressure. Mr and Mrs Robinson's daughter, Brooke, was one of the waitresses. She had been on a telephone for a lengthy time. Ms Johnson asked if she could attend to her duties. Another of Mr and Mrs Robinson's children reported to Mrs Robinson - who at the time was at her home outside the resort complex - that Ms Johnson had upset Brooke. Mrs Robinson came to the motel premises in a rage (in Mr George's words "shouting and screaming") and said to Mr George in colourful terms that if her daughter was going to be sacked, so was his girlfriend. She then "stormed off home". Mrs Robinson in describing the incident in her evidence said that she went to the motel and dismissed both Ms Johnson (by verbal direction to Mr George) and her daughter. Mrs Robinson by this event, and generally by her evidence and demeanour in the witness box, demonstrated herself to be someone who is prone to act impulsively, to make hasty decisions without checking the facts, and then to doggedly adhere to the decisions. Mr George informed Ms Johnson of his direction, but it seems that the "sacking" was not taken seriously by Ms Johnson. She went to the office to work the following Monday morning. Mrs Robinson was there, but stormed out of the office. She repeated her instruction to Mr George that Ms Johnson was not to work again in the motel. Counsel for the respondent used a note in the CRS file dated 16 August 1993 to suggest error in the evidence of the applicants, but I think the ready explanation of that note is that Ms Johnson spoke with her case manager before she went down to the office that morning. Further meetings then took place. Mr Robinson visited Ms Johnson's CRS case manager on 17 August 1993, and a meeting between the case manager, Mr Robinson, and the applicants took place at the "Low Level" on 18 August 1993. I think the case manager's notes of those meetings supports the applicants' case rather than that of the respondent. I find that at the meeting on 18 August 1993, which Mrs Robinson refused to attend, it was agreed by Mr Robinson that the respondent would continue to employ Mrs Johnson at her "full wage" but that she would keep out of the way of Mrs Robinson and perform her work arranging group bookings and promoting the motel from the manager's unit (which was immediately above the motel front office). Mr Robinson was also to continue his attempts to soothe Mrs Robinson. A further meeting with Mrs Robinson to that end was arranged on the following weekend when she informed Mr George and her husband in certain terms that Ms Johnson was never to be employed again. Notwithstanding that direction I am satisfied that Ms Johnson was thereafter employed according to the arrangement reached at the Low Level on 18 August 1993. There are several pieces of evidence that lead to that conclusion, quite apart from my general preference for the applicants' evidence. Ms Johnson's CRS case manager has recorded the following note in the CRS file: "8.9.93 Jobsite - interview with employer who states all is going well. He sees the outcome of our joint meeting as being positive. He states his willingness to set up a complete separate office upstairs in Annette and Bryant's unit so that Annette can continue her full contribution to the job and continue being an active part in the partnership of managers (Bryant and Annette)." Ms Buckeridge's evidence establishes that Ms Johnson was the person who accepted and handled her enquiry for a group booking in early March 1994. In a later telephone call about the booking Ms Buckeridge spoke to Mr Robinson who described Ms Johnson as "a manager for him". The papers in exhibit A8 provide evidence of occasions in September, November and December 1993 and March and April 1994 when Ms Johnson was dealing on the respondent's behalf with tour operators and travel companies, and with the NT Tourist Commission. Some of those documents imply that Ms Johnson was recognised by the correspondents as the respondent's representative, and some of them concern very extensive forward bookings. Mr House's evidence generally confirms important aspects of the applicants' evidence relating to Ms Johnson's employment after 16 August 1993. I have noted the respondent's submission that Mr House is a longstanding friend of the applicants but there was nothing about his evidence which causes me to discount it on that account. Ms McCoy's evidence that Ms Johnson was seated in reception when she attended on the Sunday night to learn end of week procedures provides further supporting evidence. All this evidence stands in contrast with the evidence of Mr and Mrs Robinson that Ms Johnson was not engaged at all in her former duties after 16 August 1993. A likely explanation for Mrs Robinson's vehemence in her assertions on this topic is that Mr George, Ms Johnson, and Mr Robinson successfully implemented the plan to keep the true state of affairs concealed from her. And it is not an unlikely explanation of Mr Robinson's evidence that he would rather not disclose, or have disclosed, to Mrs Robinson the true position even now. There are other entries in the CRS file by Ms Johnson's case manager (see in particular a letter to Mr Milliken dated 7 September 1993, and the referral in October 1993 to a Skillshare course) which record information presumably received from Ms Johnson to the effect that she was receiving a wage and continuing employment duties. These reports dispel the theory that a story to this effect was made up to dishonestly make this claim. These entries were made before the Industrial Relations Reform Act 1993, which introduced the unlawful dismissal provisions, was introduced into Parliament as a Bill. Once it is accepted that Ms Johnson was employed after 16 August 1993 on her "full wage", the question which must be answered is how were those wages paid, and what were they? Plainly they were not paid through the company's normal pay system that Mrs Robinson managed. That they were otherwise paid in cash, as the applicants assert, is the only likely answer suggested by the evidence. The applicants' evidence was that Mr Robinson would usually give $500 to Mr George to pass on, but on occasions gave it to Ms Johnson direct, each week after 16 August 1993 and continued to do so until the applicants went on holidays in the second week of March 1994. Mr George in his evidence offered explanations of how $500 cash per week could be diverted from revenue streams within the motel to enable these payments to be made by Mr Robinson. His evidence, though speculative, has not been answered by the respondents' case. Once it is concluded that a wage in cash was paid, the only evidence in the case as to the amount of that wage is provided by the applicants' evidence, namely that the rate was $500. That is the rate that was initially anticipated as part of the package to employ the applicants and which I have found was paid up until 16 August 1993. I find that it was the rate which continued to be paid thereafter. Moreover, the original engagement was that the amount of $500 cash would be net of tax, the tax to achieve such a payment being $177 per week. Ms Johnson was cross-examined as to the tax returns which she has filed. For the year ended 30 June 1993 she did not disclose any earnings over and above those recorded in group certificates and certificates relating to her pension and subsidy. In other words she did not disclose the cash "top up" which I have found was paid. That omission is relied on heavily by the respondent. I have reflected on counsel's arguments about it, but nevertheless have reached the conclusions which I have expressed. The tax return reflected the records of the employer which had been set up to give an appearance of regularity to achieve the payment of subsidies. I have already indicated why I think I should not reject the applicants' case because of matters relating to social security and subsidy payments. In relation to the year ended 30 June 1994 Ms Johnson did however disclose income at the rate of $677 per week from 1 July 1993 to 10 April 1994. She gave evidence that after the applicants were dismissed she attended the Taxation Office concerned that her status as an employee was not recognised in the records of the respondent. She later filed a statutory declaration disclosing gross earnings of $677 per week which were not shown on a group certificate. As this disclosure was made whilst these proceedings were on foot and is self-serving I place no weight on the 1993-4 return in resolving the issues in dispute. Strangely, the applicant in due course received a refund of tax on the footing that tax on her wages had been deducted by the employer, and paid to the Commissioner of Tax. The evidence discloses that after the applicants left the resort investigations of the respondent's business were conducted both by the Tax Office and by the Department of Labour and Industry, apparently in consequence of information being supplied anonymously to both Departments. Mr and Mrs Robinson accuse the applicants of providing this information to the Departments, which allegation the applicants deny. At least in the case of the Department of Labour and Industry's investigation the evidence gives reason to think that the information may have been supplied by a disgruntled employee other than the applicants, but the identity of the informant/s is irrelevant to these proceedings. The fact that there was a Tax Office investigation raises the possibility that the respondent was moved to pay tax on the earnings alleged by Ms Johnson, but such a payment is denied by Mr Robinson. The explanation for the refund remains unknown, and I therefore place no weight on the fact that a refund was paid. It would follow however from the findings that I have made that the respondent had a primary liability for tax under the PAYE system in respect of the wages paid to Ms Johnson. Ms Johnson was cross-examined as to her expenditure of money during the period of alleged employment with the respondent. She identified various recurring and other expenses which she says were paid by her with cash, and several cash deposits were also identified in the bank accounts of herself and of Mr George. The respondent contends that the total of the cash deposits plus the estimated expenses, many of which were joint expenses, is consistent with the respondent's case rather than that of the applicants. I am unable to draw that conclusion as the evidence does not disclose what expenses were met by Mr George. It is likely that he had personal expenses, and they may well have been sufficient to explain the expenditure of the two wages allegedly received. The termination of the applicants' employment occurred shortly after they returned from holidays. They arrived back at the motel on Sunday, 3 April 1994. That evening Mr Robinson said to Mr George that the other proprietors of the respondent had been looking at the motel books and had raised questions regarding the front office accounts which appeared to reflect irregularities, and he suggested that "little nibbles" were being taken from the front office, a statement which Mr George inferred was an accusation that money was being taken either by him or by staff under his supervision. It was agreed that there would be a meeting with Mrs Robinson in the following days to discuss the matters of concern. That meeting occurred on 5 April 1994 in the motel office adjoining the reception area. Mr George alleges that during the discussion Mrs Robinson lost her temper, called him a "f...ing incompetent c...", and stormed out of the office. Mrs Robinson denies saying other than that Mr George was incompetent, but I prefer the evidence of Mr George. Mr House, who was in reception, heard raised voices in the adjoining office and the use by Mrs Robinson of the last two of the words alleged. Mr Robinson acknowledges that his wife lost her temper and stormed out, and whilst he denies that his wife used the expletives alleged, acknowledges that he said to Mr George that he thought his wife was "a bit over the top making the statement". However, precisely what was said is not material. What is important is that a confrontation occurred which caused Mrs Robinson to abuse Mr George and storm out of the meeting. Ms Johnson left the resort the following day to fly to Perth for a family function. Over the following two days Mr House and Mr George endeavoured to answer the questions that had been raised. Mr George says that the problems stemmed from the fact that Mr and Mrs Robinson did not understand the computer system (a fact which they do not deny). The apparent inconsistencies arose from the fact that certain of the tills were counted after the front office staff closed off the records for the night at about 10.30 p.m. Takings in the tills from sections of the complex that remained open beyond that time were included in the following day's takings. Mr George says that these explanations were given to Mr Robinson who appeared to accept them. There remained a discrepancy of about $40 cash on one day from a till, but that did not seem to be a point of contention, minor "unders and overs" apparently not being unusual. On Friday 8 April 1994 Mr George requested a discussion with Mr Robinson. His evidence in cross-examination of the conversation is as follows: "I approached Mr Robinson and asked him if I could have a talk to him. We went out and sat in the bistro area by the pool and we discussed ... what was alleged to have been the problem with the front office till, and Mr Robinson agreed that we had answered all his questions in that respect and I said 'Well, you know, it would be fair under those circumstances that your wife apologised to me'. And he said, 'Well, she won't do that', and I said 'Well, it is only fair that she should, because she was wrong.' And he then said words to the effect of 'Well, she is not going to say it because she owns the bloody place' and I said "Well, be that as it may, I would like an apology' and he said, 'No, it's not going to work, no.' And I said, 'Well, what does that mean?' And he said, 'Well, you don't have a job any more.'" Mr George says they then discussed questions relating to his termination pay, a termination certificate for him, his removal expenses and holiday and termination pay. He says these matters were generally agreed. He also asked for payments for Ms Johnson including her holiday pay, and these Mr Robinson refused. He says he was told to be gone before Mrs Robinson returned from Perth the following Wednesday. Mr Robinson has a different version of the conversation. He says that Mr George requested that he be sacked as he had to care for Ms Johnson who needed 24 hour a day attention, and if he were sacked it would be easier for him to go back on to the dole. This request was refused, Mr Robinson saying that he would not sack Mr George as he had done nothing wrong. Mr Robinson says that the following day Mr George informed him that he was going anyway, and Mr Robinson replied "No way, I can't run this myself, you are not going anywhere." Nevertheless, Mr Robinson says he made enquiries for another manager and was able to secure one, and later informed Mr George that he could go the next day. It was this conversation, he says, that led to the applicants leaving on 11 April 1994 after Mr George had been paid approximately four weeks' wages including two weeks' accrued holiday pay. In support of the respondent's case correspondence from solicitors acting for the applicants was tendered. By letters dated 15 April 1994 the solicitors, who were instructed by the applicants upon their arrival in Darwin, wrote to Mr and Mrs Robinson and the respondent seeking damages for defamation in the case of Ms Johnson arising out of comments made in August 1993 about her, and in the case of Mr George arising out of the abuse offered to him by Mrs Robinson on 5 April 1994. Those letters made no reference to the applicants or either of them being dismissed. An allegation of dismissal was not made by the solicitors until a further letter of 18 April 1994. The respondent's case contends that the allegation of dismissal was something made up after they had left the resort. Mr Robinson produced four pages of notes made in a 1993 diary (being a book that was conveniently at hand at the time) which he says are notes he made during the week commencing 3 April 1994 about the events of that week. He says the notes were made shortly after the events happened, and certainly within a day or two. He purported to refresh his memory whilst giving evidence from those notes. The notes have the appearance of being made after all the events of the week had taken place. They do not have the appearance of contemporaneous notes. I think it is probable that the notes were made after the solicitor's letters were received and as part of the process of preparing instructions for the respondent's solicitors to respond to claims. The notes are not easy to follow, and I do not think they should be accorded the same significance as contemporaneous notes which record events before the true significance of those events in later litigation becomes known. I think the notes should be treated as a self-serving statement made after the threat of litigation had occurred. Significantly the notes do record a "termination" payment of one week's pay to Mr George, and refer to the offensive remark which Mr George says was made by Mrs Robinson on 5 April 1994. Evidence was led by the respondent from Ms McCoy and Mr Radovich to the effect that the applicants and Mr Robinson parted on cordial terms on 11 April 1994 - exchanging customary farewells, and with Mr Robinson offering to give a reference to Mr George. That evidence was similar to the descriptions of their departure given by the applicants. Had Mr George threatened to sue Mrs Robinson and acted in the "standoverish" manner before he left as now alleged by Mr Robinson, and recorded in his notes, I think it is extremely unlikely that the good natured exchanges would have occurred on their departure. The respondent's case also relies on a note in the CRS file from Ms Johnson's case manager dated 11 April 1994. The note records a "desperate" phone call from Ms Johnson. Whilst the note reports Ms Johnson saying that accusations were being made in the workplace about Mr George's performance, it does not state that he had been sacked - a surprising omission it is argued if dismissal had occurred on 8 April 1994. The CRS file was tendered as a business record and the author of the note has not given evidence. The difficulty with the respondent's argument is that the note does not record that Mr George and Ms Johnson were leaving the motel and travelling to Darwin on 11 April 1994 - an even more surprising omission if the note truly relates to a phone call which occurred that day. The matters recorded in the note suggest that telephone call to which the note relates occurred prior to the discussion between Mr George and Mr Robinson on 8 April 1994 when, on either version, the applicants' departure from the motel was settled. There appears to be some error in the dating of the entry of 11 April 1994, and also the next entry bearing the date "18.4.94" which reports on a "home visit" to Ms Johnson when she reported that Mr George had been sacked. It seems fairly clear that the case manager's "home visit" must have preceded 11 April 1994. The next following entry dated "10.5.94" in the records also indicates that notes were not being made contemporaneously at that stage. The dates shown, at least on that page, probably reflect the day upon which the entries were made, not necessarily the day upon which the reported events occurred. The CRS notes do not cause me to doubt the applicants' evidence about the events of 8 April 1994. That Mr George did not invent the story of being "dismissed" on 8 April 1994 some days later is supported by the evidence of Mr House who was in reception at the time. He observed Mr Robinson and Mr George go to the bistro area and engage in conversation, at the end of which Mr George came through reception and said he had been sacked. The evidence of Mr Milliken was less precise, but his recollection is that he had been informed on or prior to 12 April 1994 that Ms Johnson's employment had been suddenly terminated without warning by the employer. I find that the employment of the applicant came to an end in the circumstances described by Mr George. The suggestion by Mr Robinson that Mr George wished to be dismissed so that he could be a full-time carer for Ms Johnson I consider to be extremely unlikely, and it gains no support from the CRS notes which immediately precede that bearing the date "11.4.94". To the contrary, the notes earlier in April 1994 suggest that Ms Johnson had returned from her holiday in good spirits and with enthusiasm to resume her full employment duties. As the applicants were employed as a team, and occupied the manager's residence, it must have been intended by Mr Robinson, and plainly understood by Mr George, that the corollary of his dismissal was the dismissal of Ms Johnson and a complete revocation of their joint employment. Mr George was cross-examined to suggest that he had been incompetent in his handling of the computer system, presumably for the purpose of suggesting that his incompetence justified his dismissal. The evidence however fails altogether to establish incompetence, let alone incompetence to the level that could justify dismissal. A computer system, or at least the software for it, was recommended by Mr George. However it was supplied by an independent third party through an agent in Katherine, and was installed by that agent. Shortcomings in the system cannot fairly be attributed to Mr George. The system failed from the outset to reconcile the accounts with the bank balance. The supplier of the program, the respondent's accountant, and others engaged by the respondent spent considerable time endeavouring to locate the problem but were unable to do so. Again, that failure cannot fairly be attributed to Mr George. Other criticisms half-heartedly made about Mr George's performance are not established on the evidence, and it is notable that Mr Robinson himself gave evidence that in April 1994 he did not consider that Mr George had done anything wrong which could justify dismissal. The respondent's case accuses Mr George, after he was dismissed, of acts of dishonesty including misusing a pre-signed letterhead, stealing computer discs, and altering a termination certificate. Insofar as it is alleged that these events could now justify the dismissal (a proposition which is without support as a possibility in law) I am satisfied that Mr George was given the letter to the removalists as he says, and that he had no knowledge of the existence in the office of signed letterheads, if they existed. I found the evidence of Mr and Mrs Robinson about the letterheads very unsatisfactory. I am satisfied that he did not alter the termination certificate. The allegation that Mr George forged the initials of Mr Robinson on the certificate was thoroughly unjustified on the evidence of Ms McCoy and Mr Robinson. Upon the stealing allegation no evidence was led after the Court was informed that charges had been laid during the progress of the case and I make no finding about it, but I note Mr George on oath denied the allegation. The true reason for the dismissal I find was that Mr Robinson believed that Mr George's request for an apology would not be reasonably received by his wife, and that it would precipitate friction that he would rather avoid. In my opinion this was not a valid reason for terminating the applicants' employment, and in any event the dismissal was harsh, unjust and unreasonable. The request for an apology was a reasonable one. Even if Mrs Robinson, as an officer of the respondent, was not prepared to meet it, to dismiss Mr George on the spot without any consideration of other options was in itself harsh, unjust and unreasonable. The applicants are entitled to the declarations sought. But for the dismissal I find that their employment would have continued in all probability well beyond six months from April 1994. No substantial complaint has been made about the way in which the motel was operated and bookings and promotion were handled by the applicants. The complaints made about Mr George's conduct are particularised in a letter dated 24 April 1995 (exhibit A3). The complaints in particulars 1, 3 and 4, insofar as they related to matters over which Mr George had any control (some of them were under the control of Mrs Robinson) relate to alleged inadequacies in the computer system. The making of the complaints in my opinion reflect either a lack of understanding of the use of the computer system on the part of Mr and Mrs Robinson, or are due to matters for which Mr George should not fairly be blamed. Particular 2 relates to the production of profit and loss accounts, which even on Mr Robinson's evidence, was a task properly carried out in a timely way. More importantly no complaint had been made about these matters before 8 April 1994. I do not think these were matters which concerned the respondent about Mr George's performance at the time. Particular 5 is expressed widely to relate to tasks involving the production and filing of accurate till documentation. That complaint is not established on the evidence but in any event appears to be based on the matters of concern voiced by Mr Robinson on 3 April 1995 which were later explained apparently to his satisfaction. In these circumstances there is no reason to think that Mr George's performance would have put his future employment in jeopardy. There is a risk that Mrs Robinson may have discovered that she was being hoodwinked by her husband and Mr George about the employment of Ms Johnson. That may have cast a shadow of uncertainty over the applicants' future employment, but even then the applicants would have been entitled to the benefit of the provisions of Part VIA of the Industrial Relations Act: Bostik (Australia) Pty Ltd v Gorgevski (No.1) (1992) 36 FCR 20 at 33. I consider that compensation for the applicants should be assessed on the footing that their employment would not have been terminated by the respondent for a period significantly in excess of six months had the unlawful dismissal on 8 April 1994 not occurred. There is however the chance that the applicants may have voluntarily decided to leave the employment. I think it is unlikely that they would have done so on account of their relationship with Mrs Robinson as they seem to have managed that in the past. However the possibility of a serious relapse in the health of Ms Johnson cannot be entirely excluded, although the prognosis prior to the events of 8 April 1994 appeared to be good. Following the dismissals the health of Ms Johnson did decline, and Mr George himself became subject to depression, anxiety and panic attacks. Both of them were under medical treatment in the latter half of 1994. I accept their evidence that for the balance of 1994 after their dismissal there was no realistic prospect of them obtaining work. They are now 46 and 53 years of age respectively and on account of their ages alone they would have been likely to encounter difficulty in finding employment. By letter of 11 May 1994 from its solicitors, after these proceedings have been served, the respondent made a conditional offer to reinstate Mr George. By this time he had been interviewed by the police upon complaints made by the respondent. Further, the respondent must have realised that the applicants were then in Perth. I do not consider the offer was a genuine one. I do not consider it is relevant to the assessment of compensation. Remuneration at the rate of $500 per week net implies a gross rate of $677 per week before tax. In addition the applicants seek to value their free accommodation, food and other perquisites as part of their remuneration. I agree that it is appropriate to include the value of these perquisites. These must be broadly estimated. I consider that if an allowance of $150 in the case of each of them were made that would be reasonable, and on the evidence a conservative estimate. Six months' wages at $827 per week totals $21,502. It is also necessary to have regard to the holiday loading an entitlement to which would have accrued in that period. In my opinion the compensation for each applicant should be assessed in the sum of $19,000, after making allowance for contingencies. The cross-claim was appropriately withdrawn. Even upon the evidence of Mr Robinson, there was no basis for it. He consented to the applicants going when they did, and he did not suggest that the respondent suffered any damage. I certify that this and the preceding pages is a true copy of the Reasons for Judgment of Justice von Doussa Associate: Dated: Counsel for the applicants : Mr A Young Solicitor for the applicants: David Francis & Associates Counsel for the respondent : Mr J Reeves Solicitor for the respondent: Ward & Keller Dates of hearing : 22, 23, 24, 25, 26, 29 & 30 May 1995