Michael Issa v Greenacre Automotive Services and Greenacre Automotive Services Pty Limited [1995] IRCA 543

CATCHWORDS INDUSTRIAL LAW - UNLAWFUL TERMINATION - No VALID REASON - WAGES INLIEU OF NOTICE - Alleged MISCONDUCT - REINSTATEMENT Impracticable - Industrial Relations Act 1988 ss 170DB, 170DE MICHAEL ISSA -v- GREENACRE AUTOMOTIVE SERVICES AND GREENACRE AUTOMOTIVE SERVICES PTY LIMITED No. NI 1320 of 1995 COURT: MCILWAINE JR PLACE: SYDNEY DATE: 3 OCTOBER 1995

INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. NI 1320 OF 1994 BETWEEN: MICHAEL ISSA Applicant AND: GREENACRE AUTOMOTIVE SERVICES AND GREENACRE AUTOMOTIVE SERVICES PTY LIMITED Respondents REASONS FOR JUDGMENT 3 OCTOBER 1995 MCILWAINE JR This is an application under Division 3 of Part VIA of the Industrial Relations Act 1988 made by Mr Michael Issa for unlawful termination of his employment against his former employer, Greenacre Automotive Services and Greenacre Automotive Services Pty Ltd. That company was represented initially at the hearing by its director Mr Keith Jamieson. I have a certificate dated 3 March 1995 signed by Vice President A W D McIntyre of the Commission and certifying as follows: "In accordance with subsection 170ED(2) of the Industrial Relations Act 1988 the Commission hereby certifies that it has been unable to settle this matter by conciliation". I am thereby satisfied that the matter is properly before me. There was also apparently an unsuccessful attempt at Mediation in this court by experienced Registrars. Mr Issa was born on 21 December 1960. His first language is English and he apparently has another language, Lebanese. He first started work for Greenacre Automotive Services on 21 July 1980 and last worked for that organisation on 9 December 1994. There is no dispute between the parties that he received a written notice of termination and a copy of that notice dated 9 December 1994 was attached to his application which was signed on 15 December 1994 and filed in the Registry on that date. The remedy sought in his application is for compensation and in paragraph 21 of the application he has added the words "Also have been accused for thieving". A Notice of Employer's Appearance dated 21 December 1994 and signed by Mr George Harris, Industrial Officer of the Motor Traders' Association of New South Wales, was filed in the Registry on 12 January 1995. That Notice disclosed the full name of the respondent to be Greenacre Automotive Services Pty Limited. It suggested the company was the employer of Mr Harris. That Employer's Notice was accompanied by a facsimile message dated 21 December 1994 in the following form: "I wish to advise that the representation by the MTA on behalf of the respondent in the above mentioned matter (ISSA v Greenacre Automotive Services). The attached "Notice of Appearance" supersedes the notice filed on 20 December 1994 by the employer directly. The employer has contacted the MTA requesting representation. Please note also that the Association does not consent to this matter being dealt with by mediation." On 1 June 1995 a Notice of Appearance was filed in the District Registry by Mr Jonathon Hassett, solicitor. On 5 July 1995 a Notice of Withdrawal of Authorised Representative was filed in the Registry in which the Motor Traders' Association of New South Wales formerly withdrew their representation of the respondent. This date being the last day that I allowed for the Respondent to bring further evidence. This matter was heard over five days. When the matter first came before me, Mr Jamieson indicated, although there was a Notice of Appearance lodged on the Court file from the Motor Traders Association, he was not to be represented. He stated a representative of the Motor Traders Association could not be present to conduct the Hearing. In my view, the respondent would have been greatly assisted by that organisation in presenting his case. Nevertheless, when I offered an adjournment, he said he did not wish an adjournment and wanted to continue the proceedings, representing himself. According to the Court file, the Association was notified by letter dated 12 April, 1995 of the time and date of the hearing being 15 May, 1995. I was concerned by Mr Jamieson's advice to me that only short notice had been given of the hearing. Moreover the following response was recorded: "The Judicial Registrar: What time are they going to be here? Mr Jamieson: Well they cannot be here today it is as simple as that." There were other exchanges between Mr Jamieson and myself on this issue. Initially, I was primarily concerned to ensure that an organisation which had been granted a right of appearance in this court had not complied with its responsibilities and obligations to the Court. This was the view I gained from the responses given to me by Mr Jamieson. However, I did gain the distinct impression that Mr Jamieson was not being fully candid with me about the situation in relation to his company not being represented. In the light of the statement which was subsequently made on behalf of the Motor Traders Association, by consent of the two parties, I formed the view that Mr Jamieson, when under any pressure, would not be truthful in giving his evidence. Moreover, there were many internal inconsistencies in the evidence given on behalf of the Respondent. There was another issue where Mr Jamieson was not candid in his approach to court. This being the production of documents when called for under a Notice to Produce. On the other hand, Mr Issa tended to shrug off suggestions of improper conduct by Mr Keith Jamieson. He also gave me the impression that he was slipshod in his attitude to accountability. His solicitor, Mr Penning, invited my attention to the Applicant's evidence in the following way:- "Michael appeared argumentative and not helpful and you made comment about that at various times." Mr Penning sought to justify his reaction by the suggestion that many of the allegations were being made for the first time." In this matter I found the evidence of both the applicant and the respondent to be unsatisfactory. On balance I prefer the applicant's evidence to that of Mr Jamieson. Very early on I suggested that Mr . Fitzgerald, the external accountant of the company, take a seat at the bar table to assist Mr Jamieson to present his case. I allowed this even though Mr Fitzgerald was to give evidence in the proceedings. The evidence proceeded by way of Mr Issa giving his evidence and Mr Jamieson cross examining him about a number of allegations. Mr Jamieson said that he had from time to time, put his general concerns to Mr Issa about the unsatisfactory performance of the business. Apparently the substance of many of the allegations were never in fact put to Mr Issa. I am satisfied that when they were put by Mr Jamieson in the hearing, Mr Issa had an explanation, it may not have been a full explanation but, given the circumstances, in the main it was satisfactory. If the matters had been raised at the time when they occurred instead of being collated and stored then Mr Jamieson would have had the opportunity then of properly investigating and resolving them. At some stage during the proceeding Mr Jamieson informed me that he had a hearing disability and at some times had difficulty hearing the proceedings and therefore his understanding of what was going on may have been effected marginally. I have taken allowance of that matter however, I do not accept it as being a satisfactory explanation for the view that I have taken as to Mr Jamieson not being truthful to me. I briefly summarise the series of allegations. They can really be put down to, not charging for work or work being done and some items of equipment being put in and not allocated to the job. By way of example, one incident was recited where some repair work was done and a number of spark plugs and an oil filter placed into the vehicle. This vehicle was owned by the cousin of the applicant. Mr Phillip Issa, the cousin, gave evidence and confirmed that work of that nature described by Mr Jamieson was done to his vehicle. However, the spark plugs and oil filter had been purchased from Mr Peter Issa, the brother of the applicant, and left on the seat of the vehicle to be used for the job. Mr Peter Issa owns a small parts run that delivers to repair shops. He apparently delivered to Greenacre Automotive Services. This is a clear example of where, if Mr Jamieson had inquired at the time, he would have been able to confirm the accuracy of the explanation. However, in the absence of any evidence to the contrary, I accept the explanation of the applicant and his cousin in relation to this matter. There was another incident involving the sale of a reconditioned engine. Apparently this engine did not work. The applicant gave evidence that the person to whom that engine had been available was in telephone contact with Mr Jamieson during the hearing and he had taken no action to recover the engine. On the third day of hearing, Mr Hassett, solicitor, appeared for the respondent. The accountant for Mr Jamieson no longer appeared to assist him. Mr Hassett filed in Court a cross claim for $4100.00 for payments wrongfully withheld by Mr Issa. It became clear to me, if at this late stage, I allowed this claim, then the applicant would be required to put on a defence to that cross claim and also, as I understand the situation, a further cross claim for payment of long service leave. Moreover as I understood the case at that point to be that Mr Jamieson through his accountant had suggested that an amount of $7000 was outstanding or owed to the business. In all the circumstances, it seemed to me if I had allowed the filing of the cross claim at that stage, it would not be in the interest of either party as it would have unnecessarily expanded the proceedings. On 16th May, 1995 at the conclusion of that Days hearing I made further directions for the future conduct of this matter. Events have largely overtaken those directions which were not in my view fully complied with by the Respondent. However, it is important to set out an extract from the transcript: 3. The accountants for the applicant (sic) are to confer and resolve outstanding issues re calculation of holidays and long service leave by 4.00 pm 30 May, 1995. The company is to make available it's wages and leave records for this purpose. 4. I direct further telephone directions before me on 1 June, 1995 so that progress can be reported and I'll make any further directions at that time. 5. I also direct the respondent to advise the court as to who will have the conduct of those telephone directions and whether the MTA is to continue on the record. Do you understand that? MR JAMIESON: Yes." I had previously attempted to get the parties to resolve the long service leave issue between themselves. The parties could not agree on the calculation of that leave, so I ordered the two accountants for the Applicant and for the Respondent to produce a joint report as to what was an agreed calculation. This needed to be done because the records kept by the Respondent were defective. I understand that the Accountants reached an agreed amount. On the basis of that agreement I find the amount of Long Service Leave outstanding to be $8722.00. Both accountants also agreed on the Holiday Pay of $3437.00 and Leave Loading of $1444.00. A total amount of $13603.00. (see exhibit 17) A matter of concern to me is that one of the motivations submitted on behalf of the Applicant for this termination is the financial impact on the company of the need to pay Long Service Leave to Mr Issa. I am satisfied that Mr Jamieson was advised of Mr Issa's intention to take long service on or about 7th January 1993. (see exhibit "3") There is another signatory on that document and either party to the proceedings could have chosen to bring that person to give evidence as to his knowledge of the circumstances. However, I am inclined to accept this as a warning given by the Applicant to the Respondent that he intended to take his long service leave. Mr Jamieson also conceded that he knew of the long service leave proposal. In this regard I have had evidence from Mr Ralph William Davids to the effect that he also had been a long term employee and had been the manager of the business and that at the time of his leaving the business long service leave was not paid to him. Mr Davids was employed at Greenacre for approximately 19 years and left that employment on or about 2nd July, 1992. He gave evidence that he went on a holiday to New Zealand and reported back to work at Greenacre to be told there was no work available. He confirmed that it was quite common for "the Cash Register of the business to be out by small amounts". He testified that: "Mr Jamieson had previously had interests in several other businesses during the 1980's. To my knowledge some of those businesses experienced financial difficulties and after this occurred Mr Jamieson increasingly spent more time at Greenacre business rather that with his other businesses. Following the termination of my employment I experienced a great deal of difficulty in obtaining my holiday and long service leave entitlements pursuant to the award governing my employment. I recall that it was necessary for me to return to the business on four separate occasions to eventually obtain the full amount of accrued annual leave that was owed to me. During this period I returned to the business on a weekly basis at Mr Jamieson's request and on each occasion I received a cash payment representing a portion of the annual leave owed to me. I experienced even greater difficulty in obtaining my long service leave entitlements. Mr Jamieson effectively told me that he recognised that he owed me substantial money for long service leave. I recall that on one occasion Mr Jamieson said to me words to the effect: I don't really have the money to pay you. I expect you'll wait about 18 months for payment. I eventually formally raised the matter with the New South Wales Department of Industrial Relations or Labour Industry as I believed it was then. After what I understand was some correspondence between the Department and Mr Jamieson I agreed to accept ... regular payments of the amounts owed to me. In this regard I did not receive the first payment on account of my long service leave until around December 1994 and this payment was for $500.00 directly from the Department of Industrial Relations. I understand that the Department is acting to ensure that the cheque for this amount is obtained from Mr Jamieson." At the time of the hearing Mr Davids estimated he was still owed in the vicinity of $10,000.00. Mr Davids gave an extraordinary account of how the money was secured over night during the period he was there. Sometimes the bulk of the money was put in the safe. He also states: "But also in the last - When Mr Jamieson or we did find a shortage in the money most times the bulk of the money was not left in the till. We just left change and a couple of dollars in notes." The rest of the money was always rolled up in the safe." He confirmed that Mr Jamieson or he would put the money in the safe. When Mr Issa did not have access to a key to the safe because Mr Davids had taken it with him, Mr Issa would roll the money and hide it in a locker or "somewhere under a box". In the morning I'd come and he would say, "here's the money." He confirmed that the company had a long history of allegations of monies being not accounted for and that there was never any satisfactory explanation for that matter. In that regard it seems to me that the company was not well run even if I accept the concept suggested by Mr Hassett in his submissions: "Now, in cross-examination, my friend has pointed to many shortcomings in this business without a doubt. Did not keep receipt books and this and that; all sorts of little bits and pieces; perhaps a bit out of order but I really wonder. In small businesses out there in the western suburbs, you put them under the court's microscope, how many of them would stand up too well? How many of them would not have a double receipt book, you know, between May and June or whatever it was. It does not mean that they are not in control of their moneys. It does not mean when jobs are done, they are seen to be done, there is a procedure - invoices are issued - and the money is not received. The fact that there are these little shortcomings, does not mean that the whole thing is out of control. It is easy to draw that conclusion in a court like that because you can hammer away at this and hammer away at that and pretty soon lots of little shortcomings come out. In fact, in relation to the cash register, I would not even think Mr Jamieson understood the question properly but anyway, it (sic) certainly mucked his answer up." It does seem to me where a question of accounting for funds and ensuring that work was properly charged for, it is a case of extreme negligence on behalf of the employer that more stringent and more effective financial controls were not introduced. In saying this I do not pass any adverse comment about Mrs Murrell who was the bookkeeper for the respondent who came in two or three days a week and tried to balance the books. Mrs Murrell had an extraordinary employment relationship with the Respondent in that she apparently started to do the bookkeeping for the company in return for work done on her husband's car. This arrangement had continued even after her husband's death seven years ago. It apparently started in 1974 and since then Mrs Murrell had received no payment for the work done for the company. Mrs Murrell suggests the reason for this arrangement was that she and her late husband were on a pension and any payments of wages may have affected their pension. Evidence was given about a meeting at which Miss Sandra Cohen and Mr Issa attended with Mr Fitzgerald to discuss holiday pay due to Mr Issa. There are two versions of that meeting given by the accountants. Apparently Mr Jamieson's son was present during this meeting. He was not called to give evidence on behalf of the Respondent. I prefer to accept the version given by Miss Cohen. On this version there was a suggested discrepancy of either $8,000 or $7,000 being the claim initially made by the respondent for outstanding monies owed to the business by Mr Issa because of his alleged dishonesty. Ms Cohen was also asked to give her opinion on the financial records of the Business: "MR PENNING: What observations as a person experienced in this area of work do you make about the entries in the wages book relating to Michael Issa?---My observation, firstly I noted a terrible lot of pencil work your Honour in a wage book which should not be allowed in a wage book to start with. Not in pencil. I second noticed, three's nothing been signed by Mr Issa himself or by any other employee of monies paid out. thirdly I noticed the accrued holiday pay on every page is in different biro or different pen than what the wages are written in themselves which sometimes bring doubt of the accuracy or when they were done. White liquid paper is through the wage book. Again it brings doubt to mind of figures - of changing of figures. To my knowledge from my profession I could say this, the wage book has been written up after the event - annual leave and that section has been written up after the event. "MR PENNING: From the wage books are you able to say whether the calculation which you had originally made for accrued leave should be varied or is that accurate?---From the figures I was given by Michael they don't meet with the figures written in this book. There is approximately five and a half weeks' difference in holiday pay, in annual leave difference between this period of the book and what Michael told me. THE J.REGISTRAR: When you say difference, what's the difference and whose favour is the difference?---It's against Michael the book your Honour. The book?---The book has got him five and a half week's short of what he's telling me." Another matter of concern is the former accountant who prepared the books of the respondent during the period in question was not called to give evidence. I find it extraordinary that the accountant, not being Mr Fitzgerald; was not making suggestions as to how the Respondent could improve its methods of recording the money received. Mr Trageris, an employee of Wakim Motors, gave evidence of an arrangement with Mr Issa covering the payment for the Car Registration inspection fee of $23.00. He accepted Mr Issa as honest and trustworthy in his dealing with him. An amount of $20.00 has been deducted from the wages of the Applicant. Mr Issa handed over three $1.00 coins. The debt has been paid. The respondent has not been able to sustain its claim that Mr Issa stole "$20.00 for the Cortina job" from the business as there are just too many unresolved issues such as the method used for securing the monies at night. The conflict in the evidence of Mr Jamieson about the letters on the till which were used to record the types of job. I have not overlooked the discrepancy between the evidence given by Mr Issa as to where a particular vehicle was examined. Mr Issa's evidence being that it was being done on the premises of McWilliams Wine in Chullora. Whilst Mr Raineri, the Building and Maintenance Officer of McWilliams Wines, suggested it was done at the premises of the Respondent. However this is just one of the many inconsistencies in the evidence of the parties. The probability of other persons having access to the till cannot be discounted. This is so during the period which elapsed between when Mr Jamieson acknowledges he saw Mr Issa take the money into the office and when the till slip was attempted to be reconciled. Indeed I am not even satisfied that the Applicant failed to account to the respondent or even that he withheld the $20.00. I am not satisfied on the balance of probabilities that Mr Issa stole $20.00 from the respondent as alleged by Mr Jamieson. I find that the respondent did not have a valid reason for the termination of the employment of Mr Issa. I find the respondent to have contravened section 170DE(1). If I had been required to consider the matter I would have also found against the employer on the basis on section 170DE(2). I find also the respondent to have contravened section 170DB(1)(a) in that it did not pay the required four weeks notice. On the question of reinstatement, I don't think that I have to take too long about that issue as the main witnesses exhibited considerable antipathy to each other. It is a small business. There is a new mechanic employed. I find that reinstatement is impractical. On the question of compensation, Mr Issa was a long standing employee and from all accounts he was well regarded by the persons with whom he did business. I note that it is likely that there will be further litigation in relation to the long service leave aspects of the matter. In all the circumstances I think this is an appropriate case for me to award the maximum amount allowed. The maximum amount is $18,200.00. In addition, I believe a period of notice should have been allowed, the appropriate period of notice is four weeks an I allow the amount of $2,800.00 for that period.