INDUSTRIAL RELATIONS COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY No. WI 1545 of 1995 B E T W E E N TRAVIS MILES McDONALD Applicant A N D MERVYN FRANCIS SAMUELS Respondent Before: Judicial Registrar Millane Place: Perth Date: 19 July 1995 REASONS FOR JUDGMENT The Applicant seeks the payment of compensation and damages arising out of alleged breaches of Division 3 Part VIA of the Industrial Relations Act (the Act). He contends that between 18 March 1995 and 3 May 1995 he was employed at the Respondent's Ampol Roadhouse in Mandurah as a service station attendant working Thursday through to Sunday evenings. The termination which occurred on 3 May 1995 is said by the Applicant to have lacked the foundation of a valid reason and, in all the circumstances, was harsh, unjust and unreasonable. The Respondent, who is one of the proprietors of the roadhouse business, whilst conceding that the Applicant was employed by him contends that that employment commenced on 23 March 1995 and that it was employment for a trial period until the end of April when it was anticipated that the Respondent may have to shut down the night operation because of the threat of reduced subsidies from Ampol for this operation. Further it is contended that the Applicant was employed as a casual employee. In any event it is alleged that by the end April 1995 there was a reduction in the subsidy received and, because the cost of the night operation exceeded Ampol's night operation support contribution, on 1 May 1995 the Respondent's financial consultant advised him to reduce these costs. The Respondent sought to rationalise its costs in this area by amongst other things terminating the Applicant's employment because he was a casual employee and the last person to be employed by the Respondent. The hearing proceeded for two days during which time the following witnesses were called: By the Applicant (a) The Applicant; and (b) Louise Margaret Rennie, the Applicant's girlfriend and former employee of the Respondent. By the Respondent (a) The Respondent; (b) Nicole Louise Samuels, the Respondent's daughter and an employee of the Respondent; (c) Lorraine Murby, an employee of the Respondent; (d) Patricia Kay Turnbull, an employee of the Respondent; and (e) Joy Patricia Samuels, the Respondent's wife and a proprietor of the service station business. The Respondent appeared in person and made a considerable effort to call evidence and cross examine witnesses in circumstances where he clearly had difficulty grasping the legal issues confronting him and the limitations placed on him by the operation of the rules of evidence. I was very concerned to hear during the calling of evidence the Applicant admit on oath that he was the recipient of social security benefits during the currency of his employment with the Respondent. It was contended by the Applicant that this overlap occurred because at the time he commenced his employment he had been unemployed for some time and was in receipt of benefits. He alleged that, against his better judgment, he complied with a request from his employer that he refrain from completing an Employment Declaration Form for taxation purposes and further refrain from notifying the Department of Social Security of his change in employment status for some weeks to become eligible for a Job Start Allowance. The evidence shows that the Employment Declaration Form (Exhibit A2) was not completed until 4 May 1995, the day after the Applicant's employment had been terminated. I am not prepared to accept the 22 year old Applicant's explanation truthful or not as one which in any way justifies his conduct in receiving benefits during a period when he was employed and received $360.00 per week from the Respondent. On his own evidence the alleged request from his employer came some weeks after his employment commenced which suggests that the Applicant had not seen fit to take steps himself to give notice of his change in employment status. The alleged arrangement was denied by the Respondent and it was further denied by him that he had failed to keep proper wage records and deduct appropriate tax from the cash sums paid to the Applicant prior to last payment of salary made on 4 May 1995. Indeed, the evidence shows that the Applicant was paid cash in a yellow envelope and next to the words "Nett Amount Paid" was the sum $360.00. To my mind this directly contradicts the Applicant's assertion that when he was paid the pay envelopes failed to indicate a gross or nett payment. In respect to the abovementioned matters I am unable to accept the uncorroborated evidence of either man. In the course of the hearing I did not seek elaboration from either witness on these matters as they are peripheral to the central issues concerning the lawfulness of the termination of the employment on 3 May 1995. Both parties were informed by me on the first day of hearing that I intended to refer the transcript of the proceedings to the appropriate authority to be dealt with accordingly. The Evidence So far as the date upon which the Applicant commenced employment is concerned very little turns on whether he commenced on 18 March 1995 as alleged by both he and his girlfriend Louise Margaret Rennie (Rennie), or on 28 March as contained in the Application filed by him with the Court, or on 23 March as alleged by the Respondent. However the decision as to what date he did in fact commence employment does have bearing on whether the Court should generally accept the version of events alleged by the Applicant and Rennie. Rennie contends that on Saturday, 18 March 1995 at approximately 1.30pm she was working at the Respondent's service station and in discussion with Nicole Louise Samuels (Samuels' daughter) who was also employed at the service station, she discovered that the Respondent needed a new night shift operator. The Applicant was unemployed and she told Samuels' daughter this and indicated that the Applicant would like the job. Samuels' daughter told the Court that because of this discussion she went to the gold pay telephone and telephoned her father asking him if he would "Give Travis a go as a night operator". The Respondent and his daughter both allege that he told her that he was prepared to give the Applicant a go as a casual employee on a trial basis. In her response to cross examination Samuels' daughter contradicted her earlier evidence by only saying that her father had been prepared to give the Applicant "a go on a trial basis". Samuels' daughter alleges she called out her father's response to Rennie. Lorraine Murby (Murby), who was then employed by the Respondent as a casual console operator, gave evidence that she heard Samuels' daughter call out "Dad's prepared to give him a go on a trial basis". The Respondent himself stated that he heard his daughter call this out. Rennie's evidence was that she was told by Samuels' daughter after her conversation with her father that her father said " ... Yes, okay. Give him a ring, bring him in and we'll see how he goes". She then rang the Applicant and asked him if he "would mind coming in at night to work". On the evidence I find that it is more probable than not that the Respondent at the very least conveyed the message through his daughter that the Applicant could be employed on a trial basis and that she in turn transmitted that message to Rennie. The Respondent and his witnesses could not and did not give evidence as to whether Rennie gave that precise message to the Applicant. The evidence of both the Applicant and Rennie was remarkably deficient in any detail on what was said in the conversation between them. I find it more probable than not that Rennie did pass on the message received and when the Applicant commenced his employment on the same evening he knew that he was at the very least being employed on a trial basis and that it would be necessary to work out other matters relating to his employment with the Respondent. Both he and Rennie agreed that the arrangement was for her to train the Applicant. As to the date of the commencement of the Applicant's employment Samuels' daughter alleged that it was Thursday, 23 March 1995. She was able to say this because the call made to her father was made at the changeover of her shift with Murby. More significantly, she did not work on Saturdays. The Respondent and his wife, Joy Samuels (Mrs Samuels) alleged that the Applicant started work on 23 March 1995 because on Friday, 24 March they were going away for the weekend and this was something they rarely did. Because they were away from the Friday the Respondent did not have an opportunity to speak to the Applicant about his employment until the end of the Applicant's shift at approximately 6.00am on Monday 27 March 1995. It is agreed that the Respondent did discuss the Applicant's employment with the Applicant for the first time on this date and this discussion was corroborated by Patricia Kay Turnbull (Turnbull), another employee who was in ear-shot of their discussion on that morning whilst she was working in the kitchen. The Applicant explains the erroneous date referred to in his application filed with the Court as having occurred when he completed the form with his industrial relations consultant before confirming the date of his commencement of his employment. This suggests to me that neither he nor Rennie had a true recollection of the date and on this point the evidence of Samuels' daughter and his wife is more reliable. The Respondent also relied on the group certificate (Exhibit A5) and the extract from the wages records, which refer to 23 March as the starting date. It was asserted by the Applicant that the Respondent did not create the wage record until closer to the end of the Applicant's employment and he did this because of enquiries being made concerning a dispute between Rennie and the Respondent about her entitlement to holiday pay after she had entered into a job start agreement as a full-time employee. Rennie was employed by the Respondent pursuant to this agreement and, in January 1995 when she asked for holiday leave, the Respondent took the view that she was a casual employee and was not entitled to be paid such leave. Rennie did not take the issue up again until approximately April 1995 when the Respondent contends that he accepted that he had been mistaken in his belief that she was a casual employee. There is now litigation between Rennie and the Respondent vis-a-vis her employment, terminated on 23 May 1995. The Respondent argues that the wage records produced in evidence were contemporaneous records. He asserts that the records were kept from the time of the Applicant's employment as with all his employees' records. However, the wages book was not signed every week by each employee but was being signed from time to time. There were numerous inconsistencies in the evidence given by the Respondent on all these matters; not to mention the idiosyncrasies in the documents produced (for example, the handwritten schedule; namely Exhibit R3 which appears to have been prepared after termination and the extract from the wages book (Exhibit R1) which extract fails to record the Applicant having worked two hours less on the Easter Friday). The discrepancies lead to the conclusion that if these documents were the only evidence adduced they are not reliable evidence or a reliable record of the events. Notwithstanding these matters I am able to rely on the evidence of Samuels' daughter, his wife and Turnbull which evidence points to the starting date as being 23 March 1995. The Applicant and Rennie claim that the Applicant worked on the Saturday and Sunday of the week preceding 23 March 1995. For that period of employment the Applicant alleged that he was told by Rennie that the Respondent had instructed her to take "$90.00 out of the till, which was to cover me for those two nights". The Applicant was represented by Ms Stanton. Rennie made no reference to any arrangement for this payment in her evidence and such arrangement was not put to the Respondent at any stage. Accordingly, I have not given this evidence any weight. As at the date the Applicant commenced his employment it would be fair to say that the terms of his engagement were still not settled as between the parties. It was not until the meeting with the Respondent on the morning of 27 March 1995 that such terms were finalised. Even if the agreement to employ the Applicant on 23 March 1995 is treated as a final and binding contract of employment the discussions between the parties on 27 March 1995 can be construed as varying the contract by consent; insofar as the parties discussed and agreed upon a number of significant matters. When they met on 27 March it is agreed that the Respondent asked the Applicant how he "was going", whether the Applicant was enjoying the job and if the Applicant wished to continue to work at the service station. Up to that point the Applicant, the Respondent and Turnbull are in agreement. It is contended by the Applicant that at no stage during their first meeting did the Respondent mention the Applicant's employment status or his wages other than to say that the Respondent would pay the Applicant "cash in hand". The Applicant contends further that the only qualification raised during the discussion was that the Respondent told the Applicant he would put the Applicant on two weeks' trial "to see how I go, to see if I was happy with what I was working with and what I was doing and also if he was happy with what I was doing". The Applicant denied ever being told he was a casual employee until following the termination of his employment on 3 May 1995 when in a further conversation with the Respondent about the completion of the employment declaration form (Exhibit A2) the Applicant asked the Respondent which box the Applicant should tick in connection with question concerning his employment status. It was alleged by the Applicant that the Respondent on 27 March told him that:- (a) the night shift operation may close; (b) the Respondent had a meeting with Ampol; (c) it was not economical for the Respondent to keep the night shift operation going and the Respondent had previously tried to close down the night shift operation; (d) it was probable that the night shift operation would continue; and (e) the night shift operation may close on 1 April 1995. Concentrating on the significant elements of that conversation it is the Respondent's evidence that he "asked him was he aware that this (sic) job he would be employed as a casual employee on a trial only basis. I asked if he agreed with that. I told him that he was to be - again, that he would be paid on a casual basis the same as our previous night operator and that he would be paid in cash the same as the rest of my staff. I asked him if he was happy with that to which he was as he had been on unemployment benefits for some time and was keen to have a go at the position". The Respondent specifically denied saying that the trial period of employment was for two weeks only, stating that in the conversation which took place on that date he told the Applicant the trial period was until the end of April because "Ampol may cease our night operation". According to the Respondent the reason for telling the Applicant that the trial period might end at the end of April was to be "upfront and honest" and make the employee aware of the possibility that the night operation might close. Turnbull gave evidence that she was some two to three metres from the protagonists when they discussed the Applicant's terms of employment early on Monday 27 March 1995. In summary Turnbull's evidence corroborates that of her employer. She states that she heard the Respondent amongst other things tell the Applicant that he would be employed on a "casual trial basis" for some weeks to see if the Applicant liked the position and further for the Respondent to find out if the Applicant could handle the position. Turnbull further recalled the Respondent telling the Applicant that "he would be upfront and honest with him because he - at the time that the night operation was unprofitable and that either Mr Samuels or Ampol could possibly close the night operation after the end of April." While she did not recall hearing the Respondent tell the Applicant how much he would be paid Turnbull did recall a statement to the effect that the Applicant was to be paid "on a casual wage basis the same as the last night operator and the rest of the staff". Turnbull is still employed by the Respondent and as with all the witnesses called by the Respondent demonstrated a considerable loyalty to her employer. Nevertheless I did not interpret this loyalty as being such that she would be prepared to perjure herself for the sake of her employer. I found her to be a credible witness and, in circumstances where both the Applicant and the Respondent's credibility leaves a lot to be desired, I have accepted Turnbull's evidence as generally corroborating the Respondent on the terms of the engagement. The Termination It is common ground that on or about 3 May 1995 the Respondent rang the Applicant at the Applicant's home and asked the Applicant to "bring in" his work shirts and the employment declaration form (Exhibit A4) which by that time had still not been completed either because of the alleged arrangement between the Applicant and the Respondent delaying its filing or because, as suggested by the Respondent, the Applicant had not responded to the Respondent's requests for the return of the signed form. The Applicant alleges that he immediately interpreted the Respondent' s telephone request as a step in dismissing him. Before the Respondent could fully reply to the Applicant's question "what am I no longer working for you?",. the Applicant said "screw you I will phone you back later" and terminated the telephone conversation. He did subsequently telephone the Respondent and apologised for his outburst. The Respondent who was clearly put out by the Applicant's behaviour told the Applicant that "he was not going to be spoken to like that" and terminated the Applicant's employment. On the evidence of both parties I am satisfied that on 3 May 1995 the Respondent terminated the Applicant's employment in circumstances where it is clear that during the initial call it was the Respondent's intention to bring the Applicant's employment to an end allegedly because of the operational requirements of the business and acting on the advice of the Respondent's financial consultant to reduce the business's wages overhead. Probationary Employment Because of other findings I shall make the question of whether this was a contract of employment subject to a period of probation determined in advance and which period was reasonable having regard to the nature and the circumstances of the employment (see Regulation 30B(1)(c)) does not need to be dealt with at length. It is sufficient to say that in some circumstances the existence of a probationary period of employment might, if there was no other independent evidence to indicate to the contrary, militate against the notion that the contract of employment was for casual employment. In other words, a period of some weeks of probationary employment is inconsistent with the notion of casual employment which can be, generally speaking, terminated at the end ofthe shift period worked by the employee. In this case, on the evidence, the Respondent failed to establish that the trial period was determined in advance. Even his corroborating witness, Turnbull, stated that there was no specific period agreed to. The Applicant sought to argue a two week period, which would allow the Applicant to say that he had advanced beyond that period to permanent employment from early April 1995. The uncertainty in the evidence as to the actual period of probation suggests that there was no agreement on this point. The other matter of interest is the question of the reasonableness of the period urged by the Respondent as being probationary; that is to say, until the end of April. This argument seems to confuse probationary employment with a contract of employment for a limited period. There was no evidence from the Respondent as to any accepted period of probation in the industry however as to the nature and circumstances of this employment and, to my mind, some six weeks was probably greater than was necessary to ascertain the Applicant's aptitude for the job. Casual Employment Apart from Turnbull's specific recollection that the Respondent told the Applicant that he would be employed as a casual employee, other indicia were relied upon by the Respondent to demonstrate this arrangement. The first was that the Applicant was paid at the casual hourly rate from 23 March 1995 and when being paid at termination was given one hours additional pay at the casual rate because the Respondent's inquiries led him to believe that was the only notice required for a casual employee. The Respondent also gave evidence that from October 1994 his staff were employed as casuals in keeping with advice he had received on the operation of the business. In her submissions to the Court Ms Stanton focused on the evidence indicating that the Applicant was employed on a roster for regular shifts over a period between 23 March and 3 May 1995. It was argued, relying on the decision of Judicial Registrar Boulton in Hitchcock v Warner Brothers Movie World (unreported QI 190 of 1994) that the Applicant had a reasonable expectation of continuing employment by the employer. The Hitchcock decision has been the subject of review by His Honour Mr Justice Moore in Hitchcock v Warner Brothers Movie World (unreported QI 246 of 1995) in which His Honour found that the Judicial Registrar had not, in that case, exercised a power amenable to review; that is to say the Court had not made a finding that there was a termination of employment. Notwithstanding this finding on review I have no quarrel with the thrust of the Judicial Registrar's observation concerning the meaning of "reasonable expectation" in the context of Regulation 30B(3)(b). Otherwise in her submissions Ms Stanton made no reference to Regulation 30B(3)(a) which says:- "For the purposes of paragraph (1)(d), a casual employee is taken to be engaged for a short period unless: (a) the employee is engaged by a particular employer on a regular and systematic basis for a sequence of periods of employment during a period of at least six months;..." Unlike Mr Hitchcock, on the facts before the Court the Applicant was not able to show that he had been engaged on a regular and systematic basis for a sequence of periods of employment during a period of at least six months. Accordingly, on the evidence I find that the Applicant's employment was terminated by the Respondent however Regulation 30B(1) excludes the Applicant from the operation of Subdivisions B, C, D and E of Division 3 Part VI(A) of the Act because the Applicant was engaged for a short period within the meaning of Regulation 30B(3). The order I make is that the Applicant's application is dismissed. MINUTES OF ORDERS THE COURT ORDERS: 1. That the Applicant's application is 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 sixteen (16) pages are a true copy of the reasons for judgment of Judicial Registrar Millane. Associate: Dated: 19 July 1995 Solicitors for the Applicant: Mazza McCallum & Robinson Counsel for the Applicant: Ms Fiona Stanton Respondent in person Date of hearing: 5 & 6 July 1995 Date of judgment: 19 July 1995 INDUSTRIAL RELATIONS COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WI 1545 of 1995 B E T W E E N TRAVIS MILES MCDONALD Applicant A N D MERVYN FRANCIS SAMUELS Respondent MINUTES OF ORDERS Judicial Registrar Millane 19 July 1995 THE COURT ORDERS THAT: 1. That the Applicant's application is dismissed. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules. C A T C H W O R D S INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - CASUAL EMPLOYEE - PROBATIONARY EMPLOYMENT - Receiving Social Security benefits whilst being employed. Industrial Relations Act 1988 Division 3 Part VIA. Industrial Relations Regulations - Regulation 30B(1) and (3). CASES: Hitchcock v Warner Brothers Movie World (unreported QI 190 of 1994) Hitchcock v Warner Brothers Movie World (unreported QI 246 of 1995 TRAVIS MILES McDONALD V MERVYN FRANCIS SAMUELS No. WI 1545 of 1995 Before: Judicial Registrar Millane Place: Perth Date: 19 July 1995