Mario Bartucciotto v Euro Printing Co Pty Ltd [1996] IRCA 72

Federal Court of Australia

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DECISION NO: 72/96 CATCHWORDS INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - review of decision of Judicial Registrar - whether valid reason for dismissal - whether dismissal harsh, unjust or unreasonable - whether employee guilty of serious misconduct - meaning of serious misconduct - employee failed to reduce production order to writing leading to dispute with customer and large loss to employer Industrial Relations Act 1988 Gooley v Westpac Banking Corporation (1995) 129 ALR 628 North v Television Corporation Ltd (1976) 11 ALR 599 Cox v South Australia Meat Corporation (1995) 60 IR 293 Matter No. WI95/1177 MARIO BARTUCCIOTTO v EURO PRINTING CO. PTY LTD VON DOUSSA J PERTH 21 FEBRUARY 1996

INDUSTRIAL RELATIONS ) ) COURT OF AUSTRALIA ) ) No. WI95/1177 WEST AUSTRALIA ) ) DISTRICT REGISTRY ) BETWEEN: MARIO BARTUCCIOTTO Applicant AND: EURO PRINTING CO. PTY LTD Respondent MINUTES OF ORDER JUDGE MAKING ORDER : VON DOUSSA J WHERE MADE : PERTH DATE OF ORDER : 21 FEBRUARY 1996 THE COURT ORDERS THAT: 1. The decision of the judicial registrar delivered on 20 July 1995 be set aside. 2. Pursuant to ss.170DB and 170EE(5) of the Industrial Relations Act 1988 the respondent pay to the applicant damages of $3,350. 3. Direct the respondent to pay into Court the further sum of $1,500 within 14 days. Subject thereto stay further steps in these proceedings, including payment out of the moneys in Court, until the determination of Plaint No. 35229 of 1994 in the Perth Local Court wherein the respondent is plaintiff and the applicant is defendant, or until further order of this Court. 4. Liberty to apply. Note: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.

INDUSTRIAL RELATIONS ) ) COURT OF AUSTRALIA ) ) No. WI95/1177 WEST AUSTRALIA ) ) DISTRICT REGISTRY ) BETWEEN: MARIO BARTUCCIOTTO Applicant AND: EURO PRINTING CO. PTY LTD Respondent REASONS FOR JUDGMENT Coram: von Doussa J Place: Perth Date : 21 February 1996 This matter comes before a single Judge on a notice of motion for review under s.377 of the Industrial Relations Act 1988 ("the Act") brought by the applicant employee who is dissatisfied with a decision of a judicial registrar which awarded him $1,850 as a remedy for the termination of his employment with the respondent on 1 August 1994. That termination was held by the judicial registrar to have occurred in breach of s.170DE(1) of the Act. The decision of the judicial registrar was handed down on 20 July 1995. The applicant's notice of motion seeking review was filed and served on 10 August 1995, that is the last day prescribed for seeking a review. The respondent apparently had been prepared to abide by the result but on receiving the notice of motion it further considered its position and then wished to seek to review aspects of the judicial registrar's reasons for decision which the applicant proposed to rely on as a step in his argument that the remedy awarded was inadequate. On 23 August 1995 the respondent filed a notice of motion also seeking a review. The applicant now argues that the respondent's notice of motion was filed out of time and that the respondent should not be allowed to challenge conclusions and findings of fact made by the judicial registrar which are favourable to the applicant. With that contention I do not agree. A review conducted under s.377 is by way of a full rehearing. In my opinion, once that review process has been initiated by either side to the proceedings it is then necessary for the judge conducting the review to consider all issues afresh, save that the parties may agree between themselves that on the hearing of the review certain findings of fact by the judicial registrar should be accepted, or that some issues are otherwise agreed. Often the parties do agree that there is no need to call again the evidence that was heard in the court below, and many matters are agreed so that only particular issues become the subject of further consideration by a judge. Once the first notice of motion seeking review was filed there was no need, strictly speaking, for the other party to file a second notice of motion. On the hearing of the review it is open to each party to contend that various conclusions of fact or law unfavourable to that party in the primary decision should be decided differently. In this instance no further evidence has been adduced by the parties, there being agreement between them that the review should be conducted upon the transcript taken before the judicial registrar. Moreover, none of the primary findings of fact made by the judicial registrar have been challenged by either party. What has been challenged is the inferences of fact which are properly to be drawn from the primary facts and the conclusions that were drawn by the judicial registrar. As there has been no challenge to the judicial registrar's summary of the background evidence or of the primary facts found, the following summary is taken substantially from the reasons of the judicial registrar. The respondent carries on a printing business. It is medium sized business with 32 employees. There were five sales representatives prior to the events now before the Court. Mr Manni is the managing director of the respondent. Before Mr Manni set up the printing business he and the applicant worked together at another printing business for about 7 years. On 7 July 1989, some time after Mr Manni set up the respondent's printing business, the applicant started to work as a sales representative with the respondent. There was no written contract of employment. At the time of the termination of his employment, the applicant was 48 years of age. As a sales representative the applicant was responsible for obtaining orders from the public for printing. He also did what he could to promote and market the respondent's business. The respondent had a number of regular customers. One of those regular customers was Tony Barlow Menswear which operated a chain of clothing stores and did so through a number of divisions including Tony Barlow Formal Hire and Shearers. Mr Vidot is the national manager of Tony Barlow Formal Hire. From time to time he placed orders for the printing of docket books for Tony Barlow Formal Hire and Shearers with the respondent. Mr Vidot gave evidence that he had been dealing with the applicant for years and the two of them had become friends. Mr Vidot himself usually placed orders with the respondent and 9 times out of 10 he would deal with the applicant. Mr Vidot said that because they had become friends he and the applicant had dispensed with formalities and most orders were placed verbally either in person or over the telephone. The respondent held plates for the different types of docket books regularly required by Tony Barlow. It was only when Tony Barlow or one of the divisions required something different that formal confirmation and approval by fax was undertaken. The applicant's evidence was that for new clients and for some regular clients orders obtained by him were always faxed or given to the client in writing and confirmed. But for some regular clients including Tony Barlow, orders were taken verbally. The respondent's position at trial was that the standard procedure required that orders, once they had been costed, be confirmed by fax or letter or in some other manner that provided evidence to enable the order to be enforced. The judicial registrar however, in summarising the evidence said that: "...it is clear from Mr Manni's evidence that he knew that often orders were taken verbally. Mr Manni's evidence in cross-examination was that it was not standard procedure for clients making small orders to always give confirmation in writing, but that for large orders they should provide written confirmation." Indeed, common sense would indicate that written confirmation should be obtained as an ordinary commercial and prudent procedure with large orders. On 16 June 1994, the applicant went to Tony Barlow's premises at Mr Vidot's request. According to the applicant he went in, sat down and engaged in some social conversation. The applicant says that Mr Vidot then ordered 5,000 books of dockets for Tony Barlow Formal Hire and 2,000 books of dockets for Shearers each containing 50 separate dockets or, as they are sometimes referred to in the evidence, separate "sleeves". The applicant says that he then wrote down the order exactly as it was given and repeated it to Mr Vidot, namely "5,000 by 20, 2,000 by 50." (The ambiguity in that description is obvious). The applicant said that he went back to his office, talked to the printer and worked out a price of $7.10 per book which is about $1 less per book than was usually charged. He said that he then rang Mr Vidot and said, "$7.10 per book multiplied by 5,000". Mr Vidot replied, "That's a lot of money", and asked the applicant to give him the best price he could. The applicant acknowledged that this order was not of a normal size for Tony Barlow. According to the applicant Mr Vidot had said that he had a big job for him. There was no written confirmation of the order. The total price of the job as understood by the applicant was to be $49,700. But, as the applicant acknowledged, this total figure was not stated to Mr Vidot. Mr Vidot's evidence on the other hand was that when he placed the order with the applicant on about 14 or 15 June he asked for 5,000 leaflets for Tony Barlow Formal Hire and 2,000 leaflets for Shearers. This would amount to 100 docket books on the former order and 40 docket books on the latter. He added that there was no way that he, Mr Vidot, would order 5,000 books as Tony Barlow watches its cashflow carefully. If he had ordered 5,000 books they would have had a large quantity of books sitting on the shelves for a very long time. The usual order of 100 books lasted for 8 or 9 months. Once the order, as understood by the applicant, was put in for processing, the respondent ordered paper and after a week or so printed the very large number of docket books. That there had been some misunderstanding or mistake was not revealed until the docket books in the number understood by the applicant were delivered to Tony Barlow. Shortly thereafter there was a complaint that too many books had been delivered. Mr Vidot rang Mr Manni and said that he had only ordered the 100 books for Tony Barlow Formal Hire and after some discussion he agreed as a favour to accept 500. In the result the respondent was left with some 6,500 books not accepted by the customer. Although the extent of the loss which the respondent thereby suffered was not precisely quantified at trial, it is apparent that the parties in their dealings proceeded on an assertion by Mr Manni that the loss was in the order of $30,000. At trial the applicant, on the one hand, said that an order of 5,000 and 2,000 books respectively had been placed and, as the judicial registrar observed, the applicant remained adamant that that was the case throughout the trial. The customer, on the other hand, claimed that the order was for 5,000 and 2,000 sleeves respectively, and the judicial registrar observed that Mr Vidot remained adamant that that was the case. At times in the reasons for decision the judicial registrar referred to the difference between those two people as a "clear misunderstanding" about the order. According to the applicant, when the "misunderstanding" was discovered on the afternoon of Friday 29 July 1994 Mr Manni told him that he, the applicant, would have to make payment to the respondent for the loss incurred. It was at that point that the figure of $30,000 was mentioned. The applicant gave evidence that he felt a bit confused and said to Mr Manni, "If I have to pay, I have to pay but I want to think about it over the weekend". Mr Manni gives a fuller description of that conversation to which I shall refer in a moment. On the following Monday, 1 August 1994, the applicant told Mr Manni that as he was not the one who made the mistake, indeed he asserted that Mr Vidot was lying about the matter, and that he, the applicant, should not have to pay. Mr Manni then said, "In that case you get your things and go home". The applicant said, "Are you sacking me?" Mr Manni said, "Yes". And at that point in time plainly a summary dismissal occurred. No payments were made to the applicant at that time, but a small amount was paid to him shortly afterwards. Later, after the intervention of a government department, annual leave and leave loading up to the date of the dismissal was paid. With those payments this Court is not concerned. Mr Manni's fuller description of the events that occurred on Friday prior to the termination, and on the Monday, is contained in the following extracts from his evidence: "And did you have any further discussion with Mr Bartucciotto on the Friday?---No, only when he come (sic) back in the afternoon. And I said to him, 'What's happened with the job?' And he put the pen down on the table and everything and say, 'Mike Vidot is lying. He reckons never gave me the order for 5000 books. He reckons he gave me the order for 5000 leaves. And he doesn't want to pay it, doesn't want all this amount of books'. And I say to him, 'Did you talk to Mike Vidot?' He say, 'Yeah, that's what I did'. I said, 'What's happened now? I mean, I got to get my money, from you or from Mike Vidot, somebody's got to give me the money'. And I ask him, I say, 'Did you fax the quote, did you fax everything to Mike Vidot?' And he said, 'No, we did everything verbal'. And that's when I went a little bit over my head and I said to him, 'How can you can do anything verbal? Is for $100, $200, you fax in the price to the client; it's (sic) for 49,000 almost $50,000 you don't fax an order'. I say, 'Where's the common sense?' And that's it. And then I said, 'If Tony Barlow don't want to pay' I say give the chance and I say to him to repay $50. 'Unfortunately I want to take the company car from him - from you, got to put you through on a different position what would reduce your wages to save some money'. Because to me it was a big loss for the company." and further "he said to me that Mike - Tony Barlow wasn't prepared to pay for, you know the 49 thousand something dollars. I said to Mario, give you the chance, you know, to pay $50 a week and if Tony Barlow rings up they got to use - will use another 100 books or 200 books or whatever if you already pay - you know the money from Tony Barlow they come direct to you. I gave him all the option that was available to me. And what did he say to that?---Oh, first he say he was thinking about, he was going home thinking about on the weekend and everything." As to the events of the following Monday, the transcript of Mr Manni's evidence is as follows: "So, what was said then?---I just ask him, I say 'What's you know what did you decide?' That's what he said to me, he said 'No Tony - Mike Vidot is a liar, he gave me the order for 5000 books and I no pay.' Right, and what did you respond to that?---I responded to that, I told him sort of that if he wasn't prepared to pay I couldn't afford to keep him any more, I mean his job to bring clients - to bring profit for the clients not a loss. And I said, 'In that case just leave the car - the company car', and he said to me, 'Can I go home and get the key', I said, 'Yeah, go home with the car - bring the spare key, leave the car in front of my house'. Was there anything else said during this conversation?---No, I only said to him, I say, you know, 'On the job that you're doing you can't do it any more because I can't trust you and that's it, its finished', like that." Further, in cross examination: "Mr Manni, if Mr Bartucciotto had agreed to pay the $30,000 he would have remained as an employee of Euro, is that correct?---Yeah, but doing some other things. Okay. Now, did you give him any warning that, if he did not pay, you were going to dismiss him?---Friday. Friday. What were your exact words?---I say: I've got to get the money off from you or from Tony Barlow. Okay. I believe in examination-in-chief you said that following Mr Bartucciotto's advice that he was not going to pay, you said, 'Well, I can't afford to keep you. You'd better leave the company car.' Was there any other discussions about alternatives? Perhaps Mr Bartucciotto---?---That - yeah, that's what I said. That's - that's where there's something wrong there. And I said to him, I say: if you want to work here, even $50 a - even $50 a month, $50 per week, I will keep you here but I can't afford to give you - to leave you the company car. Maybe I put you through to do something else." What is apparent from these passages is that Mr Manni was told on the Friday by the applicant that the applicant asserted Mr Vidot was lying. Mr Manni said that he wanted the $30,000 paid and suggested that it be repaid at $50 a week. If that repayment were made he would take back the company car and put the applicant on a different position because he could not trust him any more - I interpret that to mean he could not trust him any more as a salesman. It was that general proposition that was considered by the applicant over the weekend. On this evidence, the respondent argued that the applicant had been guilty of serious misconduct that provided a valid reason for termination of the applicant's employment and moreover, a dismissal without any payment in lieu of notice: s.170DB(1)(b). On the submission of the respondent that there was a valid reason for termination, the judicial registrar in her reasons for decision said: "I have already found, and it is clear on the evidence, that Mr Bartucciotto did not always provide confirmation in writing to his clients, and Mr Manni was aware of this. I do accept, however, the submission of Counsel for the Respondent that Mr Bartucciotto was in breach of his duty of care as an employee in not reducing the order to writing. Whenever orders are taken verbally, there is room for error or misunderstanding. When the order is small, the consequences of the error or misunderstanding may be easily absorbed by the employer. However in this case, the consequences of the error were grave. The value of the order, being $49,700, differed greatly from the value of the order Mr Vidot maintains he placed, that is $994. In these circumstances, even if Mr Bartucciotto's version of the facts is correct, and it may well be, he should have sent written confirmation to Mr Vidot, or at least have gone into the size of the order more thoroughly with Mr Vidot. If Mr Bartucciotto's employment had been terminated for the reason that he breached his duty of care in this respect, I would have found that there was a valid reason under section 170DE of the Act. However, this was not the reason why Mr Manni terminated Mr Bartucciotto's employment. Mr Manni terminated Mr Bartucciotto's employment because Mr Bartucciotto refused to pay him $30,000 allegedly lost as a result of the misunderstanding or mistake about the size of the order. This does not, in my view, constitute a valid reason for termination..." For those reasons, the judicial registrar held that there had been a breach of s.170DE(1), and proceeded to assess a remedy for that breach. It was common ground that the case was not an appropriate one for reinstatement. The judicial registrar observed that in view of the gravity of the consequences of the misunderstanding relating to the orders and the bad feeling it caused between the applicant and Mr Manni, she considered it unlikely that the employment relationship would have lasted beyond a month or so in any event and in those circumstances awarded $1,850 as compensation. The applicant in his employment with the respondent earned $670 per week gross. Two weeks after his dismissal he obtained employment with another printer for $500 a week. I interpret the amount awarded as 2 weeks at $670 and 3 weeks at $170, being the difference between the pre-dismissal and the post-dismissal earnings. On this review, the applicant seeks to support the conclusion that the dismissal was based on a refusal to pay $30,000, and from that conclusion argues that it follows that a dismissal based on the refusal to pay $30,000 cannot be classed as serious misconduct. Thus 5 weeks pay in lieu of notice should have been paid under the formula prescribed in s.170DB(2). This was not the conclusion reached by the judicial registrar. On the claim under s.170DB the judicial registrar said: "The Respondent's position is that the Applicant was guilty of serious misconduct and that there was accordingly no requirement for him to be given five weeks notice as required by Section 170DB. The applicant's position is that this is not a situation of serious misconduct but a situation which a misunderstanding occurred. I am unable to accept however that this was a case of mere misunderstanding as submitted by Counsel for the Applicant. The Applicant is in event entitled separately to a remedy under Section 170EE in relation to the breach of Section 170DE." The precise intent of those paragraphs is not clear. The judicial registrar seems to be referring to the events relating to the order, not the failure to agree to repay $30,000. If that is so, the conclusion that no payment in lieu of notice was payable would infer a finding that the events leading to the order constituted serious misconduct which justified summary dismissal. The respondent now submits that the proper conclusion to be drawn from the evidence is that the dismissal was based on the failure to have the order from Tony Barlow confirmed in writing by the customer. That was the primary reason that motivated the dismissal. There was, the respondent acknowledges, a failure to agree to repay the $30,000 but the respondent contends that that was secondary; at best, from the applicant's viewpoint, there were two reasons for dismissal, one of them being the events relating to the order, which it is contended constitutes a "valid reason", the other being the failure to agree to pay $30,000. With that submission I agree. The failure to have the order confirmed, which I have already characterised as a failure to carry out an ordinary commercial and prudent procedure, resulted in this case in a significant loss to the respondent. The failure to have the order confirmed in writing invited an argument with the customer about what was agreed and presented the respondent, in the event of an argument, with a virtually insurmountable problem in establishing that the order was as asserted by its sales representative. In this case the respondent took what, in my view, was the entirely sensible course commercially of acknowledging that the order was unenforceable and giving credit for those books which were not accepted by the customer. On the afternoon of Friday 29 July 1994 the situation was that events had come to light which disclosed that there was no written order for a very substantial volume of work which had been carried out. The difficulty that arose from the absence of a written order was, I am satisfied, clear both to the applicant and to Mr Manni. The difficulties were discussed. Mr Manni made it plain that he considered there had been a serious breach of the obligations of the applicant, not by using those precise words but by indicating that he expected to be repaid the $30,000. The seriousness of the situation was obviously understood by the applicant who asked for the weekend to consider it. Had the respondent dismissed the applicant on Friday afternoon, rather than made the compromise proposal to accept a repayment and to continue the applicant's employment on varied terms, in my view the respondent would have had a "valid reason" for dismissal. That reason was, I think, plain to the applicant. However, the respondent, through Mr Manni put forward the compromise proposal. On Monday 1 August 1994 when that compromise was not accepted I consider the parties were put back into the position that they were in before the proposal was put forward, namely that there had been a failure to perform a duty which commonsense indicates was required in the performance of the duties of the applicant as a salesman. In my view, the failure to get the order in writing was the primary, essential reason that led to the dismissal of the applicant. It was a significant breach of duty and it constituted a valid reason for the purposes of s.170DE(1). That conclusion, however, raises another issue; that is whether, although there was a prima facie valid reason for the purposes of s.170DE(1), the reason ceased to be a valid one by reason of the dismissal being harsh, unjust or unreasonable pursuant to the provisions of s.170DE(2). Counsel for the applicant argues that the dismissal was harsh, unjust or unreasonable because there was a failure to comply with the provisions of s.170DC which requires that: "170DC An employer must not terminate an employee's employment for reasons related to the employee's conduct or performance unless: (a) the employee has been given the opportunity to defend himself or herself against the allegations made; or (b) the employer could not reasonably be expected to give the employee that opportunity." There is no suggestion in the present case that the opportunity to defend could not be given. The respondent says the opportunity was given; it occurred on Friday afternoon. In my view that submission is correct. There was a discussion between the parties on Friday afternoon when the seriousness of the situation was understood. Moreover, the applicant took the opportunity to answer the allegation. He did so by conceding immediately that the order was not in writing, and that was the essential allegation. Not only was he given the opportunity to answer the allegation against him, he was offered a compromise proposal to try and save his position, and he was given the weekend to think about it. In my view there was no breach of s.170DC of the Act in the circumstances. There was some reference in the transcript to whether earlier warnings of the need to get an order in writing had been given and whether there had been adequate warning that the failure to get orders in writing could lead to disciplinary action including dismissal. In my view the seriousness of the predicament of the respondent likely to flow from a failure to get an order for $49,700 in writing was obvious, so much so that this is not a case where the failure to give warning about the consequences of the breach of ordinary commercial and prudent practice constitutes a procedural unfairness which renders the dismissal harsh, unjust or unreasonable. These conclusions lead on to yet another question; that is whether the breach of duty that constituted the valid reason for dismissal amounted to serious misconduct. This question is relevant under s.170DB(1) which provides that: "170DB(1)An employer must not terminate an employee's employment unless: (a) the employee has been given either the period of notice required by subsection (2) or compensation instead of notice; or (b) the employee is guilty of serious misconduct, that is, misconduct of a kind such that it would be unreasonable to require the employer to continue the employment during the notice period." If the breach of duty did not amount to serious misconduct there should have been a payment of 5 weeks' remuneration in lieu of notice. The characterisation of the conduct in question as serious misconduct, or as conduct falling short of that description, is difficult, and I think the case is close to borderline. I have come to the conclusion that the applicant's conduct should not be characterised as serious misconduct within the meaning of s.170DB(1). In Gooley v Westpac Banking Corporation (1995) 129 ALR 628 at 636-637 Wilcox CJ referred with approval to a passage from the judgment from Smithers and Evatt JJ in North v Television Corporation Ltd (1976) 11 ALR 599. Both in North and in Gooley the question before the Court concerned the application of an award provision which permitted dismissal without a payment in lieu of notice for misconduct. In North's case, their Honours said: "It is of assistance to consider the expression 'misconduct' by reference to subject matter to which it is related and the context in which it appears. The subject matter is a termination by one party against the will of another of a continuing contract of employment on the ground of breach of one of the terms of the contract. And the context is such as to indicate that certain breaches of a non-serious nature, some of which would be within the connotation of misconduct, are not regarded as grounds for termination. In such a situation it is reasonable to interpret the expression 'misconduct' as referring to conduct so seriously in breach of the contract that by standards of fairness and justice the employer should not be bound to continue the employment. This situation would arise if there were conduct inconsistent with the fulfilment of the express or implied conditions of service. It is conduct of that kind which will justify dismissal at common law... For the purposes of the application of the common law principles to the facts of this case the remarks of the Master of the Rolls in Laws v London Chronicle (Indicator Newspaper) Ltd [1954] 2 All ER 285 at 287 and 289 are in point. He said: 'To my mind the proper conclusion to be drawn from the passages which I have cited and the cases to which we were referred is that, since a contract of service is but an example of contracts in general, so that the general law of contract will be applicable, it follows that, if summary dismissal is claimed to be justifiable, the question must be whether the conduct complained of is such as to show the servant or have disregarded the essential conditions of the contract of service... 'I do, however, think (following the passages which I have already cited) that one act of disobedience or misconduct can justify dismissal only if it is of a nature which goes to show (in effect) that the servant is repudiating the contract, or one of its essential conditions, and for that reason, therefore, I think that one finds in the passages which I have read that the disobedience must at least have the quality that it is 'wilful'; it does (in other words) connote a deliberate flouting of the essential contractual conditions'" In my view, s.170DB(1)(b) is intended to reflect the common law position referred to in this passage. And it is not intended that the expression "serious misconduct" in that section will have any different meaning. Having regard to the following matters, I have reached a conclusion that the conduct in the present case does not amount to serious misconduct within the meaning of the section. First, there is no finding on the evidence by the judicial registrar that Mr Vidot did not order 5,000 books and 2,000 books respectively. Indeed, the judicial registrar, having seen and heard the witnesses, observed that the applicant's evidence may well be correct. This Court is asked to decide the matter according to the transcript and the evidence below. On an issue such as this weight must be given to the assessment of the witnesses by the judicial registrar: see Cox v South Australia Meat Corporation (1995) 60 IR 293 at 294. As the judicial registrar considered that the applicant's version of the relevant conversations may well be correct, this Court cannot reach a conclusion that the applicant's version is incorrect. The respondent, who carries the onus on this question of serious misconduct, has failed to establish that the applicant's evidence about the order was wrong. Secondly, the evidence shows that there was no hard and fast rule in the workplace that all orders had to be reduced to writing and approved by the customer. I have observed that common sense would require that with a big order that should have been done, and it was a breach of duty not to do so, but it cannot be said that there was a breach of an inflexible and clearly understood standing order. More particularly, there was, on the evidence, no established practice with this customer that all orders were to be in writing. On the contrary there was an established practice that most of the orders were not. In these circumstances, I do not think that the failure to reduce the particular order to writing has about it the characteristic of a deliberate flouting of an essential condition of the contract of employment. The applicant's conduct was negligent but I think it lacked that characteristic of deliberate flouting. It follows, therefore, that I consider that although there was a "valid reason" for termination, it was not one that justified summary dismissal without a payment in lieu of notice. It was one that justified dismissal upon giving the notice required by s.170DB. That notice was not given, and now pursuant to ss.170DB and 170EE(5) he is entitled to an award of $3,350 (being a sum equivalent to 5 weeks pay). I add that the applicant advanced a further submission based on the language of s.170DB(1), that for conduct by an employee to amount to "serious misconduct" it must be conduct of a kind which renders it "unreasonable to require the employer to continue the employment during the notice period". It was argued that because the respondent offered to continue the applicant's employment on 29 July 1994 the applicant's conduct could not have been viewed by the respondent as of a kind where it would be unreasonable to require the respondent to continue the employment. I do not accept that argument. In my view, the offer of further employment made on 29 July 1994 was an offer of quite different employment. It was not an offer that indicates what the attitude of the employer would be to the breach of duty which had occurred in the event that the employee was not prepared to accept the offer of compromise which included the applicant making good the loss. However, for the reasons that I have given in my view the applicant is entitled under ss.170DB and 170EE(5) to the orders I have indicated. I certify that this and the preceding pages are a true copy of the Reasons for Judgment of Justice von Doussa Associate: Dated:

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INDUSTRIAL RELATIONS ) ) COURT OF AUSTRALIA ) ) No. WI95/1177 WEST AUSTRALIA ) ) DISTRICT REGISTRY ) BETWEEN: MARIO BARTUCCIOTTO Applicant AND: EURO PRINTING CO. PTY LTD Respondent MINUTES OF ORDER JUDGE MAKING ORDER : VON DOUSSA J WHERE MADE : PERTH DATE OF ORDER : 21 FEBRUARY 1996 THE COURT ORDERS THAT: 1. The decision of the judicial registrar delivered on 20 July 1995 be set aside. 2. Pursuant to ss.170DB and 170EE(5) of the Industrial Relations Act 1988 the respondent pay to the applicant damages of $3,350. 3. Direct the respondent to pay into Court the further sum of $1,500 within 14 days. Subject thereto stay further steps in these proceedings, including payment out of the moneys in Court, until the determination of Plaint No. 35229 of 1994 in the Perth Local Court wherein the respondent is plaintiff and the applicant is defendant, or until further order of this Court. 4. Liberty to apply. Note: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.

INDUSTRIAL RELATIONS ) ) COURT OF AUSTRALIA ) ) No. WI95/1177 WEST AUSTRALIA ) ) DISTRICT REGISTRY ) BETWEEN: MARIO BARTUCCIOTTO Applicant AND: EURO PRINTING CO. PTY LTD Respondent REASONS FOR JUDGMENT Coram: von Doussa J Place: Perth Date : 21 February 1996 This matter comes before a single Judge on a notice of motion for review under s.377 of the Industrial Relations Act 1988 ("the Act") brought by the applicant employee who is dissatisfied with a decision of a judicial registrar which awarded him $1,850 as a remedy for the termination of his employment with the respondent on 1 August 1994. That termination was held by the judicial registrar to have occurred in breach of s.170DE(1) of the Act. The decision of the judicial registrar was handed down on 20 July 1995. The applicant's notice of motion seeking review was filed and served on 10 August 1995, that is the last day prescribed for seeking a review. The respondent apparently had been prepared to abide by the result but on receiving the notice of motion it further considered its position and then wished to seek to review aspects of the judicial registrar's reasons for decision which the applicant proposed to rely on as a step in his argument that the remedy awarded was inadequate. On 23 August 1995 the respondent filed a notice of motion also seeking a review. The applicant now argues that the respondent's notice of motion was filed out of time and that the respondent should not be allowed to challenge conclusions and findings of fact made by the judicial registrar which are favourable to the applicant. With that contention I do not agree. A review conducted under s.377 is by way of a full rehearing. In my opinion, once that review process has been initiated by either side to the proceedings it is then necessary for the judge conducting the review to consider all issues afresh, save that the parties may agree between themselves that on the hearing of the review certain findings of fact by the judicial registrar should be accepted, or that some issues are otherwise agreed. Often the parties do agree that there is no need to call again the evidence that was heard in the court below, and many matters are agreed so that only particular issues become the subject of further consideration by a judge. Once the first notice of motion seeking review was filed there was no need, strictly speaking, for the other party to file a second notice of motion. On the hearing of the review it is open to each party to contend that various conclusions of fact or law unfavourable to that party in the primary decision should be decided differently. In this instance no further evidence has been adduced by the parties, there being agreement between them that the review should be conducted upon the transcript taken before the judicial registrar. Moreover, none of the primary findings of fact made by the judicial registrar have been challenged by either party. What has been challenged is the inferences of fact which are properly to be drawn from the primary facts and the conclusions that were drawn by the judicial registrar. As there has been no challenge to the judicial registrar's summary of the background evidence or of the primary facts found, the following summary is taken substantially from the reasons of the judicial registrar. The respondent carries on a printing business. It is medium sized business with 32 employees. There were five sales representatives prior to the events now before the Court. Mr Manni is the managing director of the respondent. Before Mr Manni set up the printing business he and the applicant worked together at another printing business for about 7 years. On 7 July 1989, some time after Mr Manni set up the respondent's printing business, the applicant started to work as a sales representative with the respondent. There was no written contract of employment. At the time of the termination of his employment, the applicant was 48 years of age. As a sales representative the applicant was responsible for obtaining orders from the public for printing. He also did what he could to promote and market the respondent's business. The respondent had a number of regular customers. One of those regular customers was Tony Barlow Menswear which operated a chain of clothing stores and did so through a number of divisions including Tony Barlow Formal Hire and Shearers. Mr Vidot is the national manager of Tony Barlow Formal Hire. From time to time he placed orders for the printing of docket books for Tony Barlow Formal Hire and Shearers with the respondent. Mr Vidot gave evidence that he had been dealing with the applicant for years and the two of them had become friends. Mr Vidot himself usually placed orders with the respondent and 9 times out of 10 he would deal with the applicant. Mr Vidot said that because they had become friends he and the applicant had dispensed with formalities and most orders were placed verbally either in person or over the telephone. The respondent held plates for the different types of docket books regularly required by Tony Barlow. It was only when Tony Barlow or one of the divisions required something different that formal confirmation and approval by fax was undertaken. The applicant's evidence was that for new clients and for some regular clients orders obtained by him were always faxed or given to the client in writing and confirmed. But for some regular clients including Tony Barlow, orders were taken verbally. The respondent's position at trial was that the standard procedure required that orders, once they had been costed, be confirmed by fax or letter or in some other manner that provided evidence to enable the order to be enforced. The judicial registrar however, in summarising the evidence said that: "...it is clear from Mr Manni's evidence that he knew that often orders were taken verbally. Mr Manni's evidence in cross-examination was that it was not standard procedure for clients making small orders to always give confirmation in writing, but that for large orders they should provide written confirmation." Indeed, common sense would indicate that written confirmation should be obtained as an ordinary commercial and prudent procedure with large orders. On 16 June 1994, the applicant went to Tony Barlow's premises at Mr Vidot's request. According to the applicant he went in, sat down and engaged in some social conversation. The applicant says that Mr Vidot then ordered 5,000 books of dockets for Tony Barlow Formal Hire and 2,000 books of dockets for Shearers each containing 50 separate dockets or, as they are sometimes referred to in the evidence, separate "sleeves". The applicant says that he then wrote down the order exactly as it was given and repeated it to Mr Vidot, namely "5,000 by 20, 2,000 by 50." (The ambiguity in that description is obvious). The applicant said that he went back to his office, talked to the printer and worked out a price of $7.10 per book which is about $1 less per book than was usually charged. He said that he then rang Mr Vidot and said, "$7.10 per book multiplied by 5,000". Mr Vidot replied, "That's a lot of money", and asked the applicant to give him the best price he could. The applicant acknowledged that this order was not of a normal size for Tony Barlow. According to the applicant Mr Vidot had said that he had a big job for him. There was no written confirmation of the order. The total price of the job as understood by the applicant was to be $49,700. But, as the applicant acknowledged, this total figure was not stated to Mr Vidot. Mr Vidot's evidence on the other hand was that when he placed the order with the applicant on about 14 or 15 June he asked for 5,000 leaflets for Tony Barlow Formal Hire and 2,000 leaflets for Shearers. This would amount to 100 docket books on the former order and 40 docket books on the latter. He added that there was no way that he, Mr Vidot, would order 5,000 books as Tony Barlow watches its cashflow carefully. If he had ordered 5,000 books they would have had a large quantity of books sitting on the shelves for a very long time. The usual order of 100 books lasted for 8 or 9 months. Once the order, as understood by the applicant, was put in for processing, the respondent ordered paper and after a week or so printed the very large number of docket books. That there had been some misunderstanding or mistake was not revealed until the docket books in the number understood by the applicant were delivered to Tony Barlow. Shortly thereafter there was a complaint that too many books had been delivered. Mr Vidot rang Mr Manni and said that he had only ordered the 100 books for Tony Barlow Formal Hire and after some discussion he agreed as a favour to accept 500. In the result the respondent was left with some 6,500 books not accepted by the customer. Although the extent of the loss which the respondent thereby suffered was not precisely quantified at trial, it is apparent that the parties in their dealings proceeded on an assertion by Mr Manni that the loss was in the order of $30,000. At trial the applicant, on the one hand, said that an order of 5,000 and 2,000 books respectively had been placed and, as the judicial registrar observed, the applicant remained adamant that that was the case throughout the trial. The customer, on the other hand, claimed that the order was for 5,000 and 2,000 sleeves respectively, and the judicial registrar observed that Mr Vidot remained adamant that that was the case. At times in the reasons for decision the judicial registrar referred to the difference between those two people as a "clear misunderstanding" about the order. According to the applicant, when the "misunderstanding" was discovered on the afternoon of Friday 29 July 1994 Mr Manni told him that he, the applicant, would have to make payment to the respondent for the loss incurred. It was at that point that the figure of $30,000 was mentioned. The applicant gave evidence that he felt a bit confused and said to Mr Manni, "If I have to pay, I have to pay but I want to think about it over the weekend". Mr Manni gives a fuller description of that conversation to which I shall refer in a moment. On the following Monday, 1 August 1994, the applicant told Mr Manni that as he was not the one who made the mistake, indeed he asserted that Mr Vidot was lying about the matter, and that he, the applicant, should not have to pay. Mr Manni then said, "In that case you get your things and go home". The applicant said, "Are you sacking me?" Mr Manni said, "Yes". And at that point in time plainly a summary dismissal occurred. No payments were made to the applicant at that time, but a small amount was paid to him shortly afterwards. Later, after the intervention of a government department, annual leave and leave loading up to the date of the dismissal was paid. With those payments this Court is not concerned. Mr Manni's fuller description of the events that occurred on Friday prior to the termination, and on the Monday, is contained in the following extracts from his evidence: "And did you have any further discussion with Mr Bartucciotto on the Friday?---No, only when he come (sic) back in the afternoon. And I said to him, 'What's happened with the job?' And he put the pen down on the table and everything and say, 'Mike Vidot is lying. He reckons never gave me the order for 5000 books. He reckons he gave me the order for 5000 leaves. And he doesn't want to pay it, doesn't want all this amount of books'. And I say to him, 'Did you talk to Mike Vidot?' He say, 'Yeah, that's what I did'. I said, 'What's happened now? I mean, I got to get my money, from you or from Mike Vidot, somebody's got to give me the money'. And I ask him, I say, 'Did you fax the quote, did you fax everything to Mike Vidot?' And he said, 'No, we did everything verbal'. And that's when I went a little bit over my head and I said to him, 'How can you can do anything verbal? Is for $100, $200, you fax in the price to the client; it's (sic) for 49,000 almost $50,000 you don't fax an order'. I say, 'Where's the common sense?' And that's it. And then I said, 'If Tony Barlow don't want to pay' I say give the chance and I say to him to repay $50. 'Unfortunately I want to take the company car from him - from you, got to put you through on a different position what would reduce your wages to save some money'. Because to me it was a big loss for the company." and further "he said to me that Mike - Tony Barlow wasn't prepared to pay for, you know the 49 thousand something dollars. I said to Mario, give you the chance, you know, to pay $50 a week and if Tony Barlow rings up they got to use - will use another 100 books or 200 books or whatever if you already pay - you know the money from Tony Barlow they come direct to you. I gave him all the option that was available to me. And what did he say to that?---Oh, first he say he was thinking about, he was going home thinking about on the weekend and everything." As to the events of the following Monday, the transcript of Mr Manni's evidence is as follows: "So, what was said then?---I just ask him, I say 'What's you know what did you decide?' That's what he said to me, he said 'No Tony - Mike Vidot is a liar, he gave me the order for 5000 books and I no pay.' Right, and what did you respond to that?---I responded to that, I told him sort of that if he wasn't prepared to pay I couldn't afford to keep him any more, I mean his job to bring clients - to bring profit for the clients not a loss. And I said, 'In that case just leave the car - the company car', and he said to me, 'Can I go home and get the key', I said, 'Yeah, go home with the car - bring the spare key, leave the car in front of my house'. Was there anything else said during this conversation?---No, I only said to him, I say, you know, 'On the job that you're doing you can't do it any more because I can't trust you and that's it, its finished', like that." Further, in cross examination: "Mr Manni, if Mr Bartucciotto had agreed to pay the $30,000 he would have remained as an employee of Euro, is that correct?---Yeah, but doing some other things. Okay. Now, did you give him any warning that, if he did not pay, you were going to dismiss him?---Friday. Friday. What were your exact words?---I say: I've got to get the money off from you or from Tony Barlow. Okay. I believe in examination-in-chief you said that following Mr Bartucciotto's advice that he was not going to pay, you said, 'Well, I can't afford to keep you. You'd better leave the company car.' Was there any other discussions about alternatives? Perhaps Mr Bartucciotto---?---That - yeah, that's what I said. That's - that's where there's something wrong there. And I said to him, I say: if you want to work here, even $50 a - even $50 a month, $50 per week, I will keep you here but I can't afford to give you - to leave you the company car. Maybe I put you through to do something else." What is apparent from these passages is that Mr Manni was told on the Friday by the applicant that the applicant asserted Mr Vidot was lying. Mr Manni said that he wanted the $30,000 paid and suggested that it be repaid at $50 a week. If that repayment were made he would take back the company car and put the applicant on a different position because he could not trust him any more - I interpret that to mean he could not trust him any more as a salesman. It was that general proposition that was considered by the applicant over the weekend. On this evidence, the respondent argued that the applicant had been guilty of serious misconduct that provided a valid reason for termination of the applicant's employment and moreover, a dismissal without any payment in lieu of notice: s.170DB(1)(b). On the submission of the respondent that there was a valid reason for termination, the judicial registrar in her reasons for decision said: "I have already found, and it is clear on the evidence, that Mr Bartucciotto did not always provide confirmation in writing to his clients, and Mr Manni was aware of this. I do accept, however, the submission of Counsel for the Respondent that Mr Bartucciotto was in breach of his duty of care as an employee in not reducing the order to writing. Whenever orders are taken verbally, there is room for error or misunderstanding. When the order is small, the consequences of the error or misunderstanding may be easily absorbed by the employer. However in this case, the consequences of the error were grave. The value of the order, being $49,700, differed greatly from the value of the order Mr Vidot maintains he placed, that is $994. In these circumstances, even if Mr Bartucciotto's version of the facts is correct, and it may well be, he should have sent written confirmation to Mr Vidot, or at least have gone into the size of the order more thoroughly with Mr Vidot. If Mr Bartucciotto's employment had been terminated for the reason that he breached his duty of care in this respect, I would have found that there was a valid reason under section 170DE of the Act. However, this was not the reason why Mr Manni terminated Mr Bartucciotto's employment. Mr Manni terminated Mr Bartucciotto's employment because Mr Bartucciotto refused to pay him $30,000 allegedly lost as a result of the misunderstanding or mistake about the size of the order. This does not, in my view, constitute a valid reason for termination..." For those reasons, the judicial registrar held that there had been a breach of s.170DE(1), and proceeded to assess a remedy for that breach. It was common ground that the case was not an appropriate one for reinstatement. The judicial registrar observed that in view of the gravity of the consequences of the misunderstanding relating to the orders and the bad feeling it caused between the applicant and Mr Manni, she considered it unlikely that the employment relationship would have lasted beyond a month or so in any event and in those circumstances awarded $1,850 as compensation. The applicant in his employment with the respondent earned $670 per week gross. Two weeks after his dismissal he obtained employment with another printer for $500 a week. I interpret the amount awarded as 2 weeks at $670 and 3 weeks at $170, being the difference between the pre-dismissal and the post-dismissal earnings. On this review, the applicant seeks to support the conclusion that the dismissal was based on a refusal to pay $30,000, and from that conclusion argues that it follows that a dismissal based on the refusal to pay $30,000 cannot be classed as serious misconduct. Thus 5 weeks pay in lieu of notice should have been paid under the formula prescribed in s.170DB(2). This was not the conclusion reached by the judicial registrar. On the claim under s.170DB the judicial registrar said: "The Respondent's position is that the Applicant was guilty of serious misconduct and that there was accordingly no requirement for him to be given five weeks notice as required by Section 170DB. The applicant's position is that this is not a situation of serious misconduct but a situation which a misunderstanding occurred. I am unable to accept however that this was a case of mere misunderstanding as submitted by Counsel for the Applicant. The Applicant is in event entitled separately to a remedy under Section 170EE in relation to the breach of Section 170DE." The precise intent of those paragraphs is not clear. The judicial registrar seems to be referring to the events relating to the order, not the failure to agree to repay $30,000. If that is so, the conclusion that no payment in lieu of notice was payable would infer a finding that the events leading to the order constituted serious misconduct which justified summary dismissal. The respondent now submits that the proper conclusion to be drawn from the evidence is that the dismissal was based on the failure to have the order from Tony Barlow confirmed in writing by the customer. That was the primary reason that motivated the dismissal. There was, the respondent acknowledges, a failure to agree to repay the $30,000 but the respondent contends that that was secondary; at best, from the applicant's viewpoint, there were two reasons for dismissal, one of them being the events relating to the order, which it is contended constitutes a "valid reason", the other being the failure to agree to pay $30,000. With that submission I agree. The failure to have the order confirmed, which I have already characterised as a failure to carry out an ordinary commercial and prudent procedure, resulted in this case in a significant loss to the respondent. The failure to have the order confirmed in writing invited an argument with the customer about what was agreed and presented the respondent, in the event of an argument, with a virtually insurmountable problem in establishing that the order was as asserted by its sales representative. In this case the respondent took what, in my view, was the entirely sensible course commercially of acknowledging that the order was unenforceable and giving credit for those books which were not accepted by the customer. On the afternoon of Friday 29 July 1994 the situation was that events had come to light which disclosed that there was no written order for a very substantial volume of work which had been carried out. The difficulty that arose from the absence of a written order was, I am satisfied, clear both to the applicant and to Mr Manni. The difficulties were discussed. Mr Manni made it plain that he considered there had been a serious breach of the obligations of the applicant, not by using those precise words but by indicating that he expected to be repaid the $30,000. The seriousness of the situation was obviously understood by the applicant who asked for the weekend to consider it. Had the respondent dismissed the applicant on Friday afternoon, rather than made the compromise proposal to accept a repayment and to continue the applicant's employment on varied terms, in my view the respondent would have had a "valid reason" for dismissal. That reason was, I think, plain to the applicant. However, the respondent, through Mr Manni put forward the compromise proposal. On Monday 1 August 1994 when that compromise was not accepted I consider the parties were put back into the position that they were in before the proposal was put forward, namely that there had been a failure to perform a duty which commonsense indicates was required in the performance of the duties of the applicant as a salesman. In my view, the failure to get the order in writing was the primary, essential reason that led to the dismissal of the applicant. It was a significant breach of duty and it constituted a valid reason for the purposes of s.170DE(1). That conclusion, however, raises another issue; that is whether, although there was a prima facie valid reason for the purposes of s.170DE(1), the reason ceased to be a valid one by reason of the dismissal being harsh, unjust or unreasonable pursuant to the provisions of s.170DE(2). Counsel for the applicant argues that the dismissal was harsh, unjust or unreasonable because there was a failure to comply with the provisions of s.170DC which requires that: "170DC An employer must not terminate an employee's employment for reasons related to the employee's conduct or performance unless: (a) the employee has been given the opportunity to defend himself or herself against the allegations made; or (b) the employer could not reasonably be expected to give the employee that opportunity." There is no suggestion in the present case that the opportunity to defend could not be given. The respondent says the opportunity was given; it occurred on Friday afternoon. In my view that submission is correct. There was a discussion between the parties on Friday afternoon when the seriousness of the situation was understood. Moreover, the applicant took the opportunity to answer the allegation. He did so by conceding immediately that the order was not in writing, and that was the essential allegation. Not only was he given the opportunity to answer the allegation against him, he was offered a compromise proposal to try and save his position, and he was given the weekend to think about it. In my view there was no breach of s.170DC of the Act in the circumstances. There was some reference in the transcript to whether earlier warnings of the need to get an order in writing had been given and whether there had been adequate warning that the failure to get orders in writing could lead to disciplinary action including dismissal. In my view the seriousness of the predicament of the respondent likely to flow from a failure to get an order for $49,700 in writing was obvious, so much so that this is not a case where the failure to give warning about the consequences of the breach of ordinary commercial and prudent practice constitutes a procedural unfairness which renders the dismissal harsh, unjust or unreasonable. These conclusions lead on to yet another question; that is whether the breach of duty that constituted the valid reason for dismissal amounted to serious misconduct. This question is relevant under s.170DB(1) which provides that: "170DB(1)An employer must not terminate an employee's employment unless: (a) the employee has been given either the period of notice required by subsection (2) or compensation instead of notice; or (b) the employee is guilty of serious misconduct, that is, misconduct of a kind such that it would be unreasonable to require the employer to continue the employment during the notice period." If the breach of duty did not amount to serious misconduct there should have been a payment of 5 weeks' remuneration in lieu of notice. The characterisation of the conduct in question as serious misconduct, or as conduct falling short of that description, is difficult, and I think the case is close to borderline. I have come to the conclusion that the applicant's conduct should not be characterised as serious misconduct within the meaning of s.170DB(1). In Gooley v Westpac Banking Corporation (1995) 129 ALR 628 at 636-637 Wilcox CJ referred with approval to a passage from the judgment from Smithers and Evatt JJ in North v Television Corporation Ltd (1976) 11 ALR 599. Both in North and in Gooley the question before the Court concerned the application of an award provision which permitted dismissal without a payment in lieu of notice for misconduct. In North's case, their Honours said: "It is of assistance to consider the expression 'misconduct' by reference to subject matter to which it is related and the context in which it appears. The subject matter is a termination by one party against the will of another of a continuing contract of employment on the ground of breach of one of the terms of the contract. And the context is such as to indicate that certain breaches of a non-serious nature, some of which would be within the connotation of misconduct, are not regarded as grounds for termination. In such a situation it is reasonable to interpret the expression 'misconduct' as referring to conduct so seriously in breach of the contract that by standards of fairness and justice the employer should not be bound to continue the employment. This situation would arise if there were conduct inconsistent with the fulfilment of the express or implied conditions of service. It is conduct of that kind which will justify dismissal at common law... For the purposes of the application of the common law principles to the facts of this case the remarks of the Master of the Rolls in Laws v London Chronicle (Indicator Newspaper) Ltd [1954] 2 All ER 285 at 287 and 289 are in point. He said: 'To my mind the proper conclusion to be drawn from the passages which I have cited and the cases to which we were referred is that, since a contract of service is but an example of contracts in general, so that the general law of contract will be applicable, it follows that, if summary dismissal is claimed to be justifiable, the question must be whether the conduct complained of is such as to show the servant or have disregarded the essential conditions of the contract of service... 'I do, however, think (following the passages which I have already cited) that one act of disobedience or misconduct can justify dismissal only if it is of a nature which goes to show (in effect) that the servant is repudiating the contract, or one of its essential conditions, and for that reason, therefore, I think that one finds in the passages which I have read that the disobedience must at least have the quality that it is 'wilful'; it does (in other words) connote a deliberate flouting of the essential contractual conditions'" In my view, s.170DB(1)(b) is intended to reflect the common law position referred to in this passage. And it is not intended that the expression "serious misconduct" in that section will have any different meaning. Having regard to the following matters, I have reached a conclusion that the conduct in the present case does not amount to serious misconduct within the meaning of the section. First, there is no finding on the evidence by the judicial registrar that Mr Vidot did not order 5,000 books and 2,000 books respectively. Indeed, the judicial registrar, having seen and heard the witnesses, observed that the applicant's evidence may well be correct. This Court is asked to decide the matter according to the transcript and the evidence below. On an issue such as this weight must be given to the assessment of the witnesses by the judicial registrar: see Cox v South Australia Meat Corporation (1995) 60 IR 293 at 294. As the judicial registrar considered that the applicant's version of the relevant conversations may well be correct, this Court cannot reach a conclusion that the applicant's version is incorrect. The respondent, who carries the onus on this question of serious misconduct, has failed to establish that the applicant's evidence about the order was wrong. Secondly, the evidence shows that there was no hard and fast rule in the workplace that all orders had to be reduced to writing and approved by the customer. I have observed that common sense would require that with a big order that should have been done, and it was a breach of duty not to do so, but it cannot be said that there was a breach of an inflexible and clearly understood standing order. More particularly, there was, on the evidence, no established practice with this customer that all orders were to be in writing. On the contrary there was an established practice that most of the orders were not. In these circumstances, I do not think that the failure to reduce the particular order to writing has about it the characteristic of a deliberate flouting of an essential condition of the contract of employment. The applicant's conduct was negligent but I think it lacked that characteristic of deliberate flouting. It follows, therefore, that I consider that although there was a "valid reason" for termination, it was not one that justified summary dismissal without a payment in lieu of notice. It was one that justified dismissal upon giving the notice required by s.170DB. That notice was not given, and now pursuant to ss.170DB and 170EE(5) he is entitled to an award of $3,350 (being a sum equivalent to 5 weeks pay). I add that the applicant advanced a further submission based on the language of s.170DB(1), that for conduct by an employee to amount to "serious misconduct" it must be conduct of a kind which renders it "unreasonable to require the employer to continue the employment during the notice period". It was argued that because the respondent offered to continue the applicant's employment on 29 July 1994 the applicant's conduct could not have been viewed by the respondent as of a kind where it would be unreasonable to require the respondent to continue the employment. I do not accept that argument. In my view, the offer of further employment made on 29 July 1994 was an offer of quite different employment. It was not an offer that indicates what the attitude of the employer would be to the breach of duty which had occurred in the event that the employee was not prepared to accept the offer of compromise which included the applicant making good the loss. However, for the reasons that I have given in my view the applicant is entitled under ss.170DB and 170EE(5) to the orders I have indicated. I certify that this and the preceding pages are a true copy of the Reasons for Judgment of Justice von Doussa Associate: Dated:

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