C A T C H W O R D S INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - claim of UNLAWFUL TERMINATION - whether there was a VALID REASON for termination - HARSH, UNJUST OR UNREASONABLE INDUSTRIAL RELATIONS ACT 1988 Ss 170DC, 170DE, 170EA, 170EDA NICHOLAS NORMAN VENUS -v- BRASS MONKEY PUB AND BRASSERIE - WI95/1757 BEFORE: R D FARRELL JR PLACE: PERTH DATE: 27 NOVEMBER 1995 IN THE INDUSTRIAL RELATIONS ) COURT OF AUSTRALIA ) WESTERN AUSTRALIA ) DISTRICT REGISTRY ) No. WI 95/1757 BETWEEN: NICHOLAS NORMAN VENUS - Applicant AND: BRASS MONKEY PUB AND BRASSERIE - Respondent MINUTE OF ORDERS BEFORE: R D FARRELL JR PLACE: PERTH DATE: 27 NOVEMBER 1995 THE COURT ORDERS THAT: 1. The Application be dismissed. NOTE: Settlement and entry of Orders is dealt with by Order 36 of the Industrial Relations Court Rules IN THE INDUSTRIAL RELATIONS ) COURT OF AUSTRALIA ) WESTERN AUSTRALIA ) DISTRICT REGISTRY ) No. WI 95/1757 BETWEEN: NICHOLAS NORMAN VENUS - Applicant AND: MATILDA BAY BREWING CO LTD TRADING AS THE BRASS MONKEY PUB AND BRASSERIE - Respondent BEFORE: R.D. FARRELL JR PLACE: PERTH DATE: 27 NOVEMBER 1995 REASONS FOR JUDGMENT This is an application under Section 170EA of the Industrial Relations Act 1988 for compensation arising from the alleged unlawful termination of the employment of the applicant, Nicholas Norman Venus ("Mr Venus"), by the respondent, Matilda Bay Brewing Co Ltd trading as the Brass Monkey Pub and Brasserie ("the Brass Monkey"). Reinstatement is not sought. The application was heard with another application for compensation under Section 170EA of the Act, arising from the termination of the employment of Luke Ciaron Brennan ("Mr Brennan") by the Brass Monkey arising out of largely the same circumstances as this application. Ms Frayne, who appeared for Mr Venus, contends that there was no valid reason for Mr Venus' dismissal, contrary to Section 170DE (1) of the Act, and that in any event his dismissal was harsh, unjust or unreasonable, contrary to Section 170DE (2) of the Act. Mr Sher, who appeared for the Brass Monkey, contends that the Brass Monkey terminated Mr Venus' employment for a valid reason connected with his conduct, and that, having regard to Mr Venus' conduct, the termination was not harsh, unjust or unreasonable. Ms Frayne further contends that Mr Venus was not given the opportunity to defend himself against the allegations made relating to his conduct, contrary to Section 170DC of the Act. Mr Sher contends he was given that opportunity. Mr Venus' Employment History The Brass Monkey is a popular hotel and eatery in the heart of Northbridge, the premier restaurant and night-life district of Perth. It has a small bottleshop which serves as one of the few liquor outlets for the many passing restaurant patrons. Mr Venus began working part-time in the bottleshop of the Brass Monkey in March 1993, becoming a full-time employee in August 1993. In November 1994, he was made the Bottleshop Manager. By 4 June 1995, he was apparently the longest serving staff member at the Brass Monkey. I accept Mr Venus' evidence that, in so far as the procedures involved in managing the bottleshop were concerned, he generally continued to do things the way he had seen them done by his predecessor. I am left with the impression, having considered all the evidence, that while Mr Venus was ultimately accountable to management, in fact he was not closely supervised, and was left to run the bottleshop on a day to day basis as he saw fit, subject to broad guidelines and practices. As an example of such a policy, the Brass Monkey contends that stock was not to be transferred from the bottleshop to another part of the hotel without the proper stock transfer procedures being carried out. Mr Venus confirmed the existence of this policy in his evidence. Under the procedure, an order form was filled out by the staff in each department and submitted to the bottleshop. The order was then made up and countersigned by the senior person on duty in the bottleshop. The elaborate nature of the procedure tends to indicate that a high priority was placed by the management on the control and accounting for of stock in its business. Mr Venus, as Bottleshop Manager, answered directly to the Manager of the Brass Monkey. There were also a number of duty managers, who were responsible for supervision of staff and cash control. One of the Duty Managers was Mr Brennan and another was Mr Michael Hawkins ("Mr Hawkins") who appears to have been the most senior of the Duty Managers and who was sometimes referred to by the applicant as the Assistant Manager. At the end of May 1995, a new Manager was placed in control of the Brass Monkey - Mr Christopher Batten ("Mr Batten"). There was evidence of an alleged personal dislike on the part of Mr Batten toward Mr Venus, and a consequentially imputed intention to "get rid of him", even before Mr Batten began at the Brass Monkey. There was evidence of a meeting between the men before Mr Batten took up his position, to deal with this alleged antipathy. Mr Venus also gave evidence of feeling excluded and isolated from the management and workings of the Brass Monkey after Mr Batten's arrival. For example, he was not invited to attend meetings of managers he had previously attended. I am satisfied that any antipathy between Mr Batten and Mr Venus did not play any role in Mr Batten's decision to terminate Mr Venus' employment. I am reinforced in this conclusion by the fact that Mr Batten acted consistently in also dismissing Mr Brennan, notwithstanding their apparently good relationship and in dismissing a Mr David Skene ("Mr Skene"), another employee accused of the same conduct. I am also cognisant of the evidence to the effect that Mr Venus had open to him the option of taking a job at the same rate of pay at the Como - an affiliated hotel to the Brass Monkey. Had it therefore been Mr Batten's wish to be rid of Mr Venus there was clearly an easier means of achieving that. Mr Venus Orders a Case of Peel Estate Shiraz Mr Brennan returned from a trip to the South-west of Western Australia on Thursday 25 May 1995 with some bottles of Peel Estate Shiraz, which he recommended to Mr Venus at a staff tasting of the Brass Monkey's new wine list held that day. Mr Venus and Mr Brennan decided to order a case of the wine, purely, Mr Venus says, for "evaluation", but he says they had decided to pay for it. In cross-examination, Mr Venus said the case was to be used at his and Mr Brennan's discretion, to be distributed and consumed by whomever they saw fit. On Tuesday 30 May 1995, Mr Venus placed an order for a case of the Peel Estate Shiraz with Mrs Bonice Murray ("Mrs Murray"), a representative of MGM Wine Distributors Pty Ltd ("MGM"), who were the wholesale distributors of the wine. It was part of a much larger order of 32 cases placed that day with MGM (Exhibit V1). He negotiated a deal with Mrs Murray whereby the Brass Monkey would be invoiced for only eleven of the twelve bottles of Peel Estate Shiraz delivered. Mr Brennan was present when the case was ordered. Mr Hawkins gave evidence of a conversation with Mr Venus and Mr Brennan in Bar 3 on the evening of Tuesday 30 or Wednesday 31 May 1995. He says they told him they were going to get a carton of a good new vintage of wine. Mr Hawkins says he asked them how they were going to purchase the wine, and on learning they were going to order it through the hotel told them to make sure they did it right, because if they did it wrong, it might look bad. The terms of this conversation do not appear to have been put to Mr Venus or Mr Brennan in cross-examination. On Friday, 2 June 1995, half the MGM order arrived, including the case of Peel Estate Shiraz. It was a split delivery, made necessary by the Brass Monkey's limited cellar space. The remainder of the order was due to be delivered in the week beginning Monday, 12 June 1995. Mr Venus claims that no invoice arrived with the first delivery on 2 June 1995. He wasn't there when the wine was delivered. He says he assumed the invoice would arrive with the second half of the order. This was not accepted by the Brass Monkey. Mrs Murray was called to give evidence. Although she could not say from her own direct knowledge that the invoice belonging to the first split delivery was delivered, she said it was the practice of MGM always to include the invoice with the first delivery, and that she would be surprised if it had not gone out. She said she had never heard of a case where an invoice hadn't been sent with a delivery. A copy of the invoice was put into evidence (Exhibit V2). It appears to be a computer print-out, which bears the printed date "01/06/95". However, the copy tendered in evidence was faxed by MGM to "Michael" - presumably Michael Hawkins - on 13 June 1995, the day after Mr Venus was dismissed. This was clearly not the actual original invoice. The significance of the claimed lost invoice is that, without the invoice, Mr Venus says that he was unable to calculate the price of this new product line of wine. It was part of Mr Venus' normal duties to designate the retail price of new lines of wine, based on their invoice price. Mr Hopley, who had managed the Brass Monkey before Mr Batten's appointment, confirmed that Mr Venus had a certain amount of discretion in relation to pricing margins. Some items of stock which had been delivered as part of the first delivery on 2 June 1995 were priced by Mr Venus and put on the shelves for retail sale. Mr Venus says that he could do this, notwithstanding the missing invoice, because they were not new lines, and in most cases existing stock had an existing price. He would know from the distributor if there were a price change. Until the retail price of the Peel Estate Shiraz was calculated, Mr Venus says, the wine could not be paid for. While he and Mr Brennan began drinking the wine before the arrival of the missing invoice with the second delivery, he says it was always their intention that the wine would be paid for, once the price was known. Indeed, Mr Venus contends that it was always his intention to pay for the wine, and then recover the money from Mr Brennan and Mr Skene. He says that once the price was known, the remaining bottles would have been put out on display for retail sale, but with the option of being purchased by Mr Brennan or himself. The Brass Monkey says that even if the invoice was missing, Mr Venus could easily have ascertained the price, by ringing MGM. Mrs Murray's evidence was that MGM left a price list with customers, but she conceded that the size of the overall order could affect the discount received by the customer. However, she confirmed that the price could have been ascertained from MGM's office staff, and that it would be a quite simple phone call. Mr Venus' evidence was that he tried to "chase up" the invoice and to contact Mrs Murray at MGM to obtain the price but she was unavailable. It seems she was on holiday. He could not say why he did not ask someone else at MGM to send a copy of the missing invoice, or at least to provide him with the price of the Peel Estate Shiraz. He says it did not cross his mind. Instead he decided to wait for the invoice to come with the second delivery. Mr Venus told Mr Brennan when the wine arrived. Mr Brennan's evidence was that he asked Mr Venus what he owed, but Mr Venus told him the invoice hadn't arrived. Between Saturday 3 June 1995 and Wednesday 7 June 1995, Mr Brennan took 3 bottles for consumption by himself or his associates, Mr Venus took a bottle for himself and gave one away to a customer well known to him, and Mr Skene, a casual bottleshop employee of the Brass Monkey, also took a bottle. Although it appears some of the wine was consumed on the premises, including at staff meetings, and there was some reference in the evidence to "tasting and evaluation", I am satisfied that the wine was primarily used for personal consumption. Mr Hawkins was in the bottleshop when Mr Brennan emerged from the storeroom with two bottles of the wine. It would seem this occurred on Sunday 4 June 1995, the evening of the staff meeting. Mr Hawkins says the following exchange took place: Mr Hawkins: "Do you want me to transfer those?" (ie. complete a stock transfer form) Mr Brennan: "No". Mr Hawkins: "Are you going to buy those?" Mr Brennan: "No". Mr Hawkins says he then insisted that Mr Brennan at least sign for them in the bottleshop diary. He says that Mr Brennan seemed quite hesitant, and eventually wrote, at 5 June 1995 in the diary (Exhibit V3), "2 x Peel Estate Shiraz", and then left the bottleshop with the wine. Mr Hawkins then added the words "Luke owes for - " and signed the note. He then drew a box around the note and a large asterisk, presumably to ensure it came to Mr Venus' attention. Mr Brennan's evidence was that he told Mr Hawkins "It's all been looked after - Nick's organising the invoice". Mr Batten says that, when recounting the events to Mr Batten some days later, Mr Hawkins characterised Mr Brennan's behaviour in the bottleshop as "obstructive" and said that Mr Brennan had told him to "butt out". Mr Hawkins did not recount this himself in evidence. Also on the evening of Sunday 4 June 1995, Mr Hawkins says he had a conversation with Mr Venus where he raised his concerns about the wine, saying that it didn't seem right to him. He says Mr Venus said it was OK because they had bought the crate of wine, but when Mr Hawkins asked if they had a receipt, Mr Venus admitted they didn't, and when questioned further he admitted they hadn't paid for it. Mr Hawkins says he told Mr Venus "You know very well that we don't have any credit here". Mr Hawkins says he felt uneasy after the conversation but did not speak to Mr Venus again about the matter. This conversation was put to Mr Venus in cross-examination, and he denied being asked by Mr Hawkins about paying for the wine. Mr Venus looked acutely uncomfortable during this passage of cross-examination and I prefer the evidence of Mr Hawkins on this matter. Mr Hawkins denied that, by not doing anything immediately, he was in some way authorising the transaction. He says that he was prepared to give Mr Venus and Mr Brennan time to put things right. He assumed the reason they did not pay for the wine immediately was that they did not have the cash. Mr Hawkins said he decided he would give them until the following Thursday 8 June 1995 to pay for the wine. One of the factors in fixing that time frame was the fact that by then they would have been paid. It must be borne in mind that although it was Mr Batten's evidence that Mr Hawkins had some supervisory function over the bottleshop, Mr Hawkins was a duty manager like Mr Venus. Though he was uneasy about what Mr Venus and Mr Brennan were doing, Mr Hawkins did not feel he had the personal authority to stop it, other than by drawing their attention to the general policies. If they chose to do it anyway, all he could do was ensure that what was being done was recorded. Mr Hawkins finally approached Mr Batten, the new manager, on Friday 9 June and recounted the events, asking Mr Batten to intervene. Mr Batten rang the Manager of Matilda Bay Brewing Company Ltd, Nick Trimbole, who reminded him he must be objective and mustn't lose his cool. It seems he also advised Mr Batten in a later call that the employees concerned should be treated consistently. Mr Batten says he rang the managers from the other hotels owned by Matilda Bay to gauge what they believed the appropriate response to the allegations should be, beginning with Mr Hopley. Mr Hopley confirms that he was called by Mr Batten. Mr Venus is Interviewed and Dismissed On Friday 9 June 1995, Mr Batten went into the bottleshop where Mr Venus was on duty, located and took the six remaining bottles of Peel Estate Shiraz, and told Mr Venus to come with him. Mr Venus followed Mr Batten to his office. Mr Batten had arranged for Mr Hawkins to look after the bottleshop in Mr Venus' absence. In the office, Mr Batten gestured to the half empty case of wine and said "Explain". Mr Venus responded "It's a box of wine". After prompting, Mr Venus went on to explain that he and Mr Brennan had decided to order a case of wine, and recounted the manner in which the stock had been acquired and distributed. Mr Batten says Mr Venus admitted that he'd had one bottle, Mr Brennan had had four and Mr Skene had had one. This differs slightly from Mr Venus' evidence, but this is of no great importance. Mr Batten says it was put to Mr Venus and admitted by him that the case of wine had not been paid for, but Mr Venus had said they had every intention of paying for it themselves. As far as I can see, there was no specific evidence that Mr Venus volunteered to Mr Batten at that time or at any stage during the interview process that the invoice had not arrived. Mr Venus says that Mr Batten accused him of ordering wine for his own personal use, using the company logo without authority, and of failing to inform the Manager of the ordering of the new product. Mr Batten then told Mr Venus that he was suspended and charged with gross misconduct. He said Mr Venus had until Monday 12 June 1995 to "think of a good excuse" or he would be dismissed. Mr Venus then left. When Mr Venus attended the Brass Monkey on Monday 12 June 1995, he says Mr Batten alleged he was guilty of gross misconduct in giving credit to himself and to Mr Brennan and Mr Skene. It was Mr Venus' contention that the charge had been changed. He says Mr Batten's response was that the charge was "all-encompassing and far reaching". Mr Batten denies that the details of the allegation of gross misconduct changed and that he made the response attributed to him. Mr Batten went on to dismiss Mr Venus. Mr Venus was paid 40 hours pay in lieu of notice (Exhibit V4). Mr Venus says Mr Batten acknowledged when dismissing Mr Venus that there had been no intention to deceive the Brass Monkey. Explaining his decision to the Court, Mr Batten said that managers in Mr Venus' position were in a relationship of fidelity and trust, and that he as overall manager should not feel he should have to babysit them. He considered both the ordering of the product under the company name for personal use and the removal of the product from the bottleshop without payment as reasons justifying the dismissal. It seems that in the end Mr Venus never paid for the wine. It appears on the evidence that he was never asked, and never offered, to pay for it. Was There A Valid Reason For Dismissal Connected With Mr Venus' Conduct? Section 170EDA (1) (a) confers upon the employer the onus of proving that there was a valid reason for termination. Mr Sher, in his written outline of submissions, says that the reason for Mr Venus' dismissal was his breach of the Brass Monkey's very strict "no credit" policy for all staff members, of which he says Mr Venus was very well aware. This, he contends, constitutes a valid reason for dismissal. The ordering by Mr Venus of wine for his own personal use using the company name without authority was, Mr Sher says, a further reason for dismissal which, he contends, also constitutes a valid reason for dismissal. Mr Sher says that it is immaterial whether Mr Venus intended to pay for the stock at some future time, and the Brass Monkey does not now contend that he didn't intend to pay at some future time. It should be noted at this point that the Brass Monkey initially nominated "Theft of product from bottleshop" as the reason for unsatisfactory work performance on the Department of Social Security Separation Certificate issued to Mr Venus on 19 June 1995 (Exhibit V5). An amended certificate was issued on 2 August 1995, citing instead "Consumption of stock without payment, in breach of hotel policy" (Exhibit V6). Mr Batten gave evidence that the employee who had completed the original certificate was reprimanded for using the word "theft". I observe at this point that I would not have been satisfied on the balance of probabilities that Mr Venus intended to steal the wine. I find, on balance, that it was his intention to eventually pay for the wine or, perhaps more accurately, it was not his intention not to pay for the wine. I amplify these comments below. Ordering Wine for Personal Use Using Company Name? I am not satisfied that the ordering by Mr Venus of wine for his own personal use using the company logo without authority was, in the circumstances, a valid reason for dismissal. Mr Hopley, who was manager of the Brass Monkey immediately prior to Mr Venus' dismissal, said in his evidence that he wouldn't regard it as misconduct for Mr Venus to order in wine for his own consumption, provided he didn't take the wine without paying for it. It was within Mr Venus's authority, he said, to order a new line of wine. It was also anticipated that staff could purchase liquor at a discount. It was Mr Venus' uncontested evidence that staff were given an across the board 15% discount on product bought from the hotel. Mr Venus said, without elaborating, that he had had requests from management to purchase product for them. Mr Venus said Mr Batten put it to him during his interview on the Friday night that an employee of the "Sail and Anchor", an affiliated hotel, had been dismissed for ordering liquor for his own personal use using the company name without authority. However, Mr Batten confirmed in evidence that in that case the employee concerned was on-selling the product for private profit - that is, effectively competing with his employer and depriving his employer of profit. A Strict "No Credit" Policy for all Staff Members? It was the Brass Monkey's contention that it had in place a very strict "no credit" policy for all staff members, and that Mr Venus was well aware of it. It should first be observed that this policy was nowhere reduced to writing. Given that some of the Brass Monkey's policies are reduced to writing, for example, in the induction leaflet under the heading "Staff Etiquette - What We Expect From You" (Exhibit B1), it would perhaps be good practice for such a policy to be conveyed to the staff in writing. However, merely because a policy is not in writing, it does not follow that the policy does not exist and is not known to staff. It is still possible, albeit more difficult, for the Brass Monkey to prove by other means that the policy existed and was known to Mr Venus. The Court's attention was drawn to items 11 and 12 of the Staff Etiquette leaflet, which provide: "STAFF DRINKS Soft drinks are free to staff on duty during approved breaks, but should be taken out of sight of customers. All staff drinks must be rung through the cash register as a 'charge'. Staff must not register their own drinks. CHARGES Staff drinks and other drinks as approved by the manager/duty manager must be rung through the cash register on the 'charge key'." (My emphasis) While providing a context for any "no-credit" policy, these provisions do not, in their terms, relate to credit. Mr Venus claimed not to be aware of a general "no-credit" policy applicable to him. Indeed, he said there was a credit system in place in the bottle shop whereby staff could obtain stock as long as it was duly noted either in the credit book or in the bottleshop diary. Over time, he stopped using the credit book, because he said people weren't using the system. After that, he used the diary or the back of the stock transfer sheets. In the course of the evidence, the Court's attention was drawn to a number of entries in the diary which would appear to suggest that credit was being extended. Mr Hopley said in evidence that he did not become aware of the diary until March 1995. Mr Hopley gave unequivocal evidence that the Brass Monkey had a "No-Credit" policy. I should note at this point that Mr Venus' evidence suggested that Mr Hopley had been favourably disposed to him while Mr Hopley was Manager of the Brass Monkey. Unlike Mr Batten, there was no suggestion of any personal antipathy between Mr Venus and Mr Hopley. Mr Hopley was forthright in his evidence, and gave some evidence with respect to the ordering by Mr Venus of liquor for personal use which did not further the Brass Monkey's case. It was Mr Hopley's evidence that Mr Venus certainly knew of the "No Credit" policy after March 1995, as a result of an incident involving the then chef of the Brass Monkey. The evidence relating to this incident is detailed below. At that time, Mr Hopley says he told Mr Venus there was to be no more credit. His evidence was that it was not possible that he didn't make it clear to Mr Venus that there was to be no credit to anybody - not just the chef. Further, Mr Hopley says that soon after the incident with the chef, he made it clear to all management staff, which includes Mr Brennan, at a management meeting that no credit was to be given to anybody. He emphasised in his evidence that the "No Credit" rule was not a new rule, and that he was merely reminding staff of a pre-existing policy. Mr Hopley's evidence was supported by that of Mr Hawkins, a duty manager at the Brass Monkey. Though Mr Hawkins appeared nervous at the beginning of his evidence, he was a very impressive witness. He seemed an earnest person who took his responsibilities very seriously. His evidence was natural and given in an open fashion. He impressed me as a witness of truth. Where his evidence has conflicted with other witnesses, I have preferred his evidence. It was Mr Venus' evidence that the chef had had a continuing line of credit with the bottleshop since before Mr Venus assumed the management of the bottleshop. Mr Venus carried on this practice. There was no express limit but it would generally only run up to about $100 - the equivalent of 3 bottles of Jack Daniels Bourbon, which was apparently the chef's drink of choice. In around March 1995, the chef went on holiday, and while on holiday, received two more bottles, taking his debt to a new high. Mr Hawkins saw an entry in the Bottleshop diary (Exhibit V3) at 24 March 1995 which said "Simon owes $181.80". Simon was the chef. Mr Hawkins said that he was shocked to find that credit had been given by Mr Venus to the chef, because it was Mr Hawkins' understanding that the Brass Monkey didn't give credit and never had given credit. "It doesn't happen", he said. He told the then manager, Mr Hopley, leaving the following note in the manager's diary: "Brian, is credit for staff in the B/shop ok. Simon's account currently is running at $213.90 - are you aware of this?" (Exhibit M1) In the meantime, the chef was contacted and, according to Mr Venus, the debt was repaid. There were differing accounts of the resulting discussion between Mr Hopley and Mr Venus. Mr Venus' evidence was that Mr Hopley expressed his concern that so much credit had been given. His concern was not assuaged by the news that the debt had been repaid. The discussion ended with Mr Hopley saying "Well, that's no more credit then", which Mr Venus says he understood to mean no more credit to the chef, rather than an instruction that no more credit was to be given to anybody. Mr Venus says that he did not regard the discussion as a reprimand and that he gave no further credit to the chef. Mr Hopley says he was very angry, and told Mr Venus in no uncertain terms that credit was not on - not even for himself. He says he told Mr Venus that it was better that staff use an IOU, that is get a money loan from Mr Hopley or a Duty Manager. Mr Hawkins, who was present, has a fuller version of this conversation. He says Mr Hopley said to Mr Venus "You know we don't do credit". He says that Mr Venus looked very uncomfortable, and admitted that he had been giving the chef credit. He recalls the conversation ending with Mr Hopley telling Mr Venus that it shouldn't have happened and should never happen again, and that if it did, he would "have to terminate someone's employment". The so-called "chef incident" had an epilogue. The chef was dismissed some weeks later in an unrelated incident, and it was found at that time that the chef had been given another bottle of Jack Daniels on credit. Mr Hopley said that on learning of this, he spoke to Mr Venus and told him he was going to be fired if he had given the credit. Mr Venus denied that he gave the chef the bottle on credit. He told Mr Hopley that it had been a casual member of staff working at the time in the bottleshop. Mr Venus took it on himself to contact the casual, and later advised Mr Hopley that the casual had resigned, so the matter came to rest there. Mr Hawkins says he had also spoken to Mr Venus regarding small amounts of credit given to female customers. When challenged, Mr Venus said he would cover it if it was not paid, and to Mr Hawkins' knowledge it was always paid. Ms Frayne took Mr Hawkins to a number of other entries in the diary after the chef incident on 24 March 1995 which she suggested indicated a credit system was still in place. These extracts are contained in exhibit V7. Mr Hawkins' evidence was that he did not consistently look in the bottleshop diary, but rather looked every couple of weeks. He had therefore not seen every entry. The following entries were included: "30 March 1995 Kate - Jodie took 2 bottles of Chinaman's Bridge Merlot - She will pay for them today. Paid. 9 April 1995 1 x Anchor Legend Shirt - Freebie to customer. 6 May 1995 Nic, Holly from the Como is coming to collect 8 x Wyndham champagne to drink upstairs. 16 May 1995 1 x ctn of Bowen Cab S Returned from Como Monday Night. M Hawkins. 18 May 1995 Queens borrowed 2 x RB Polo shirts to be paid in stock to the same value. See Mike. 26 May 1995 Nick - Annette returned the bottle of Amberly Cab Merlot that she borrowed. 2 June 1995 Nicko, Dee dropped off 4 btls of wine off last night. They were in the brown bags next to the till. Apparently she owed them to you. Pete. 3 June 1995 Nick - PICA loaned 1 ble Stoly but I can't find the loan book." Mr Hawkins explained that there was a recognised exemption to the credit policy with respect to lending stock to affiliated businesses. These included the Queens hotel and the Como, which were also owned by Matilda Bay Brewing Co. This exemption had also come to extend to other outlets close by, such as the PICA cafe. Mr Hawkins' attention was drawn to an entry in the diary (Exhibit V3) at 11 June 1995 - while Mr Venus was suspended - saying "Remind Kate: No stock to be lent to anyone (company) not affiliated with Matilda Bay". He did not recognise the handwriting. Mr Hopley was shown this entry, and said that it was not inconsistent with the "No credit" policy. These entries were not put to Mr Hopley or Mr Batten. They would seem to indicate that after the chef incident Mr Venus continued to extend minor amounts of credit, and that he was sufficiently overt about it to have them noted in the bottleshop diary, which had been the manner in which the credit to the chef had come to management's attention. Based on a consideration of all the evidence, and accepting as I do the evidence of Mr Hawkins and Mr Hopley, I find that the Brass Monkey had a policy in place to the effect that no credit was to be extended to staff or to customers. I find that this policy applied to Mr Venus, notwithstanding his managerial status, and I find that Mr Venus was reminded of this policy in March 1995 during and immediately following the incident with the chef. Was the Termination Harsh, Unjust or Unreasonable, Having Regard to Mr Venus' Conduct? Having been satisfied by the employer that there was a valid reason for dismissal, namely Mr Venus' breach of the Brass Monkey's strict "no credit" policy, Section 170EDA (1) (b) places the onus on Mr Venus to prove that, having regard to his conduct, the termination was nevertheless harsh, unjust or unreasonable and therefore contrary to Section 170DE (2). I have found that Mr Venus was made aware in March 1995 of the seriousness with which the Brass Monkey regarded its "no credit" policy. That it should expect the policy to be adhered to strictly is consistent with the elaborate nature of its stock transfer policy and its written policies on staff drinks. The Brass Monkey obviously placed great importance on stock control. Clearly, Mr Venus did not regard the matter with the same importance. He was effectively given a level of autonomy in many aspects of how he ran the bottleshop. He took it upon himself to exercise his own judgment on the giving of small amounts of credit. A perusal of the credit system he permitted to continue after the "chef incident", as revealed by exhibit V7, indicates a very slap dash approach to stock control, with - for example - product apparently being returned which those in charge of the shop did not know had been borrowed. More importantly, having found that he was at least made aware of the policy in March 1995, he was deliberately ignoring a general policy. What is worse, with respect to the case of Peel Estate Shiraz, the credit Mr Venus was extending was partly to himself. Not only did he extend credit to himself but he failed to record that fact, or seek approval of his manager. This was clearly against the spirit of the Brass Monkey's stock control policies, which require staff not to ring up their own drinks and require stock transfer forms to be countersigned. The incident which led to the dismissals tends to underline the wisdom of such policies, if only because the policies' requirements serve to crystallise the intentions of the people involved. I'm not convinced that when Mr Venus ordered the wine, he had decided whether or not he was ordering it for himself or for the hotel. His evidence that he would put the remaining six bottles on the shelf available to be purchased suggests he considered the case to be the hotel's until the wine was taken bottle by bottle. The question then arises as to who owned the free bottle? I have grave doubts as to whether or not the invoice in fact arrived with the first delivery, but given that Mr Brennan supports Mr Venus' evidence on this, I am prepared to accept on the balance of probabilities that it didn't. Mr Venus was therefore able to defer the decision as to whether or not the wine had to be paid for. Throughout the hearing, there was evidence that the wine was drunk "to evaluate it". It was contended in Mr Venus' "Summary of Facts" (and denied by the Brass Monkey) that he had claimed to Mr Batten that "he had not ordered the stock for his own purposes". Why then was he saying he intended to pay for it? I suspect the actual position was that Mr Venus hadn't yet decided whether or not he was obliged to pay for the wine, and was not keen to make that decision sooner than he had to. This sort of vague thinking would not have been possible had the Brass Monkey's policy been strictly adhered to. I accept that not every business manager would take such a strict view of stock control and credit control. However I have found that the Brass Monkey did take that view, and that Mr Venus knew they took that view. On balance, I am not satisfied that the Brass Monkey's decision to dismiss was harsh, unjust or unreasonable. Was Mr Venus Given the Opportunity to Defend Himself? I am satisfied that the breach of the credit policy was raised at the Friday interview. It may be that Mr Venus' attention naturally focused on the other allegation about purchasing product for personal use under the company name because that was the allegation to which he had some defence. Mr Venus has never denied that he took the wine or allowed it to be taken without paying for it. Mr Venus was given an opportunity to explain the breach of the credit policy . He had the weekend to prepare his case. I am satisfied therefore that the Brass Monkey complied with the requirements of Section 170DC. Conclusion For the above reasons I will order that the application be dismissed. I certify that this and the preceding 19 pages are a true copy of the Reasons for Judgment of Judicial Registrar R D Farrell. Associate Date: Counsel for the applicant: Ms E Frayne Solicitors for the applicant: E H Frayne Counsel for the respondent: Mr J L Sher Solicitors for the respondent: Corrs Chambers Westgarth Hearing date: 11 & 12 October 1995 Judgment date: 27 November 1995