INDUSTRIAL LAW - UNLAWFUL TERMINATION - EMPLOYMENT CLAIM - Issue whether employer terminated employment or employee resigned - Possibility of oral resignation. Industrial Relations Act 1988, s.377. MOHEBATULLAH MOHAZAB v DICK SMITH ELECTRONICS PTY LTD No. NI.0327R of 1994 CORAM: WILCOX CJ PLACE: SYDNEY DATE: 1 JUNE 1994 IN THE INDUSTRIAL RELATIONS COURT) OF AUSTRALIA ) No. NI.0327R of 1994 NEW SOUTH WALES DISTRICT REGISTRY) BETWEEN: MOHEBATULLAH MOHAZAB Applicant AND: DICK SMITH ELECTRONICS PTY LTD Respondent CORAM: WILCOX CJ PLACE: SYDNEY DATE: 1 JUNE 1995 MINUTES OF ORDER THE COURT ORDERS THAT: 1. The declarations and orders made by the Judicial Registrar on 27 March 1995 be set aside and in lieu thereof it be ordered that the application be dismissed. Note: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules. IN THE INDUSTRIAL RELATIONS COURT) OF AUSTRALIA ) No. NI.0327R of 1994 NEW SOUTH WALES DISTRICT REGISTRY) BETWEEN: MOHEBATULLAH MOHAZAB Applicant AND: DICK SMITH ELECTRONICS PTY LTD Respondent CORAM: WILCOX CJ PLACE: SYDNEY DATE: 1 JUNE 1995 EXTEMPORE REASONS FOR JUDGMENT WILCOX CJ: This an application by an employer, Dick Smith Electronics Pty Limited, for review of a decision given by a Judicial Registrar of the Court on a claim by an employee Mohebatullah Mohazab, of unlawful termination of employment. The claim is brought under Division 3 of Part VIA of the Industrial Relations Act 1988 and the employee relies upon alleged breaches of ss.170DC and 170DE of the Act. Contrary to the case put to him on behalf of the employer, the Judicial Registrar found that the employee's employment had been terminated by the employer, not by the employee. He also found a breach of both ss. 170DC and 170DE. The issue raised for determination on the review is the question whether the employer terminated the employee's employment or whether the employee resigned. Part VIA Division 3 applies only to a termination of employment by an employer as distinct from the employee. The relevant facts in relation to this issue are within a short compass. The employee had been employed by the employer since November 1988; that is to say, some five and a half years before the date of termination of the employment on 20 May 1994. At the relevant time, Mr Mohazab was the manager of the Quality Control Unit of the company. In that position, he had access to electrical items that were sent to the unit for testing. It appears there were procedures in place designed to ensure the security of those items. Events occurred that gave rise to a suspicion of an act of dishonesty by Mr Mohazab. I should say immediately that he has at all times denied any dishonesty and the company does not claim in this case that he was guilty of an act of dishonesty. There was considerable evidence before the Judicial Registrar relating to a particular radio and there was argument about the effect of this evidence. Further evidence on this issue was tendered to me on the review. After some discussion, it was agreed between Mr Scott, counsel for the employer, and Mr Mohazab, who appeared for himself, that it was not necessary for me to determine the question whether there was an act of dishonesty or not. It was agreed that it was common ground that, at the time Mr Mohazab's employment came to an end, the employer was conducting an investigation into matters concerning the radio and that officers of the employer, rightly or wrongly, suspected Mr Mohazab of an act of dishonesty in connection therewith. It is clear, and indeed common ground, that, on the afternoon of 19 May 1994, Mr Mohazab was interviewed by Mitch Jeffrey, the Managing Director of a security consultancy company that provided services to Dick Smith Electronics. It seems that Mr Jeffrey was on the premises of the company at North Ryde for other purposes. He had with him an employee of his company named Emma Iverach. It is common ground that there was a meeting involving Mr Mohazab and Mr Jeffrey and Miss Iverach at the premises of Dick Smith Electronics during the course of which reference was made to the investigation then being undertaken in relation to the radio. Vince Mahoney, the Finance and Administration Manager of Dick Smith Electronics, was also present. Mr Jeffrey gave evidence to the Judicial Registrar, which evidence has been treated by consent as being before me, that he made some handwritten notes of the interview and that he had these typed up in the form of a record of interview after his return to his Woolloomooloo office later that afternoon. According to the record of interview, Mr Mahoney opened the meeting by introducing himself and Ms Iverach to Mr Mohazab and, during the course of this opening, made the following statement: "We have made just about all the inquiries we can make and I must say that a lot of things point towards you being responsible, Moh. We now are faced with the decision to call in the police. As you know it is our policy to fully investigate all matters relating to stock loss and where required call the Police to prosecute the persons responsible." Mr Mahoney says that he did not remain throughout the whole of the meeting. This statement is corroborated by Mr Jeffrey and Ms Iverach but Mr Mohazab says the opposite. Mr Jeffrey set out in his record of interview a series of questions and Mr Mohazab's answers. According to the record of the interview, towards its end he asked Mr Mohazab whether there was anything else he would like to say about the matter and Mr Mohazab responded, "I do not want to subject my family to the police". According to the record of interview, Mr Jeffrey then said: "Your family will not be subjected to the police even if the police are called in to this matter" and Mr Mohazab replied, "I have no choice. I do not want my family involved. I do not want the Police involved. I want to resign". Again according to the record of interview, Mr Jeffrey told Mr Mohazab that, if he wished to resign, this was his choice only and what the company did about the matter was their choice and not his. He also told Mr Mohazab that if Dick Smith Electronics called the police and he had done nothing wrong, he had nothing to fear and Mr Mohazab replied, "No. I do not want to have a record against my name. I could not tell my wife. I have worked hard and I have a salary adjustment to enable me to do what I want to do." Mr Jeffrey then told Mr Mohazab that he could not accept his resignation and he would not have a record against his name if he had done nothing wrong. According to the record of interview, he then asked Mr Mohazab whether he wished to speak to Sharon Horn, who was the personnel officer. Mr Mohazab indicated that he did. Mr Jeffrey and Ms Iverach then left the room and had a conversation with Mr Mahoney. Mr Jeffrey's record of interview quotes Mr Mahoney as asking Mr Mohazab whether it was correct that he wanted to resign and Mr Mohazab replying, "I have no other option". The record of interview then records Ms Iverach as saying: "Moh. Again I want you to understand that you have all the options. You have nothing to fear if you have done nothing wrong. No-one will force you to resign if you do not want to." The record of interview then reports Mr Mahoney as saying: "Moh, I ask you again is this what you want?" and Mr Mohazab replying: "Yes". The record states that Mr Mahoney said: "Please understand that this is clearly your choice and no-one else's. The decision is purely yours". Mr Mohazab said: "I understand but I want to". It appears that Ms Horn was then told of the situation. She said in evidence that she herself asked Mr Mohazab whether it was his wish to resign and he said, "yes". She said, if that is what he really wanted, she would go and organise the paper work. She went away to have a resignation letter prepared. It seems that, in the meantime, Mr Rex Callaghan, who was the technical services manager of the company, took Mr Mohazab back to his office to collect his belongings and then escorted him to the front door of the building where he had access to the car park. Apparently, Mr Callaghan did not realise that it was intended that Mr Mohazab first sign a letter of resignation. After Mr Callaghan returned to the offices, Ms Horn gave him the letter of resignation. He took it out to the car park. He found Mr Mohazab and had him sign it. The letter of resignation is dated 19 May 1994 and addressed to the Manager of Dick Smith Electronics. It reads: "I, Mohebatullah Mohazab, hereby resign from Dick Smith Electronics effective today, 19 May 1994". There is no doubt that Mr Mohazab signed the letter of resignation. He does not suggest that he was unaware of its nature or misled in any way. There was, indeed, an investigation on foot. There is a dispute as to whether Mr Jeffrey raised the choice of police charges being brought against Mr Mohazab or his resignation. Mr Mohazab says that this is what was put to him by Mr Jeffrey. That is denied by both Mr Jeffrey and Ms Iverach. The Judicial Registrar was critical of a number of aspects of the interview conducted by Mr Jeffrey. In the first place, he thought that it would have been desirable for Mr Mohazab to have had the opportunity of having at the interview a person who was independent or there to protect his interests. I agree with this criticism. I think that Mr Mohazab was under a disadvantage in the way in which the interview was conducted. The Judicial Registrar also criticised the fact that no steps were taken to record the interview. Mr Jeffrey said he took handwritten notes. These were produced as an annexure to his affidavit. The handwritten notes seem to support the typewritten record of interview, at least in relation to critical matters. I have not made a comparison in respect of all matters. It may be that Mr Jeffrey took handwritten notes at the time, and took them comprehensively and fairly. However, there is always a doubt when notes are taken in this way, without authentication by the person under investigation or any independent record as would have been provided if there had been a recording made at the interview. Because he was critical of these aspects of the matter, the Judicial Registrar said he was not prepared to act on Mr Jeffrey's account of the interview where it conflicted with that of Mr Mohazab. I understand this approach. However, it seems to me that, even if one accepts Mr Mohazab's account of the interview, it is extremely difficult to resist the conclusion that he resigned his employment. As I have said, there is no doubt that he signed the letter of resignation. I accept that, if a person signs a letter of resignation or offers an oral resignation under a misunderstanding of what he or she is doing or as a result of misleading or deceptive conduct, that resignation ought to be treated as not having been given. But that is not this case. Mr Mohazab knew what he was doing. I have no doubt that he was heavily influenced in his decision to resign by concern about the matter being reported to the police. He told me today that he thought that there would be a police record, even if he was acquitted of any charge. I accept that this was his position. It is quite consistent with what he told Mr Mahoney, according to the record of interview. Of course, there would be no police record if the charge failed; but it seems that Mr Mohazab was unaware of that. Even so, I do not think this affects the validity of the resignation. His false assumption about a record did not stem from anything said to him by anybody acting on behalf of Dick Smith Electronics. It was a false assumption on his part. It seems to me that Mr Mohazab was faced with a difficult choice. He did not wish to leave his employment. He had a good job and was apparently happy in his work. He needed the income from that job but he was confronted with an allegation against him. He regarded this as ill-founded, but he thought it would result in a record against his name. He regarded this latter possibility so seriously that he decided to resign rather than put himself at risk of that happening. I can understand that he might come to regret making that choice and I think it is fair to say that, if the matter had been better handled at the time and he had been allowed more time to consider his position, he might not have made that choice. But he clearly did so, and he made the choice knowingly and without being the victim of misleading or deceptive conduct. It seems to me that, whether the decision was a good one or a bad one, it was his decision and he is visited with its consequences. I should add that the Judicial Registrar commented that there was an error or judgment insofar as the company is concerned in that: "Ms Horn did not take Mr Mohazab out of the situation with which he had been confronted". I understand the Judicial Registrar to be saying that a caring employer would have ensured that Mr Mohazab had time, and the opportunity of independent advice, before his statement of resignation was treated as operative. I agree with that view, but this is not a requirement imposed on employers by the legislation. The Judicial Registrar accepted Ms Horn's evidence that she asked Mr Mohazab whether it was his wish to resign and that he stated it was. It would have been desirable for her to have done more than this, but I think this evidence clearly establishes that there was an election made by Mr Mohazab, whether a wise one or otherwise, in favour of resignation. The Judicial Registrar commented on the fact that the document was given to Mr Callaghan, for signature by Mr Mohazab, when he had already been escorted from the premises. He seems to have thought that this was too late because the escorting from the premises acted as a termination by the company. With respect, I cannot see the matter in that way. A resignation may be given orally. There is no legal necessity for writing. If Mr Mohazab clearly indicated to Mr Mahoney and/or Ms Horn, as the Judicial Registrar accepted, that he wished to resign under the circumstances as they then were, this was a statement capable of immediate implementation. It was implemented when Mr Callaghan took Mr Mohazab back to his office to pick up his belongings and escorted him to the front door of the premises. Writing was not necessary. The operative action was the oral resignation. There was no element of termination by the company unconnected with the resignation. As may be apparent from what has been said, I have considerable sympathy with Mr Mohazab. He seems to have lost a good position under circumstances which did not rise above suspicion of his having committed an act of dishonesty. But the decision is one he made. It is a decision he may regret; but it has the effect that it was he who terminated the employment not the employer. It follows the claim should have been dismissed. The order that I make is that the declarations and orders made by the Judicial Registrar on 27 March 1995 be set aside and in lieu thereof it be ordered that the application be dismissed. I certify that this and the preceding ten (10) pages are a true copy of the Reasons for Judgment of his Honour Chief Justice Wilcox. Associate: Dated: 1 June 1995 APPEARANCES The Applicant appeared in person Counsel for the Respondent: M Scott Solicitor for the Respondent: Cutler Hughes & Harris Date of hearing: 1 June 1995