Attard v Sportscraft Group Pty Ltd [1996] IRCA 340

DECISION NO: 340/96 INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 5851 of 1995 B E T W E E N : LINTEN ATTARD Applicant AND SPORTSCRAFT GROUP PTY LTD Respondent Before: Judicial Registrar Murphy Place: Melbourne Date: 18 July 1996 EX-TEMPORE REASONS FOR JUDGMENT On 4 October 1995 the applicant was dismissed from his position as an accounts payable clerk with the respondent. He issued these proceedings on 23 November 1995. At the commencement of the proceedings the question of an extension of time was determined as a preliminary issue. The Court granted the applicant an extension of time and said that the reasons would be given at a later date. The reasons now follow. Extension of Time Evidence was led on the question of an extension of time but the evidence did not go to the merits of the applicant's case. It was agreed between the parties that for the purposes of the decision whether or not to extend time the applicant had an arguable case. After the applicant's employment was terminated on 4 October, he received a Separation Certificate and his entitlements on 6 October. On 5 October he attended at the Employee Relations Commission of Victoria and issued an application pursuant to s38 of the Employee Relations Act. On 9 October at the suggestion of his father, he obtained legal advice from his current solicitor. At that time the solicitors were aware of the time limits under the Act. Evidence was given by a clerk employed by the applicant's solicitors, Mr Stynes, that at all times the applicant instructed him that he wished to be reinstated to his position with the respondent. The solicitors took a decision that in order not to inflame the matter, proceedings would not be issued at that stage and they would seek to resolve the matter through the Employee Relations Commission proceedings. The ERC proceedings were originally set down for a prima facie hearing on 12 October. This date was adjourned at the request of the solicitors for the applicant until 21 November to allow them sufficient time to prepare. At the prima facie hearing on 21 November discussions ensued between the two parties. Those discussions were unsuccessful, and the Chief Commission Administration Officer found that the applicant had a prima facie case. The applicant's solicitors then took the view that it was appropriate to issue proceedings under the Industrial Relations Act to ensure that the applicant had a wider range of remedies open to him given that now the respondent had made it clear that it would be resisting his preferred option that he be reinstated to his previous employment. These proceedings were issued in the Australian Industrial Relations Commission ("AIRC") on 23 November 1995. On 1 December 1995 the ERC proceedings were listed for a conciliation conference. After discussions between the respective solicitors acting for both parties the solicitors for the respondent indicated to the solicitors for the applicant that they would not be attending the conciliation meeting. On 4 December the ERC proceedings were listed for hearing on 22/23 December. After that on 18 December 1995 the solicitors for the applicant wrote to the solicitors for the respondent noting a conciliation conference in these proceedings and proposing that the ERC hearing scheduled for 22 December be vacated and that the respondent agree to an extension of time on the proceedings under the Act. The respondent by letter dated 19 December 1996 advised the solicitors for the applicant that it did not agree. By letter dated 19 December 1995 and faxed at 6.30 pm on that date the solicitors for the applicant advised the solicitors for the respondent that they would be withdrawing the ERC proceedings. Factors for consideration I was referred to a number of authorities of the court on the question of an extension of time to apply. The authorities such as Turner v K & J Trucks Coffs Harbour Limited (1995) 61 IR 412, Coker-Godson v National Dairies Ltd (No. 2) (1995) 57 IR 186, and Nelson v Scholle Industries (von Doussa J, 17 October 1995, unreported) generally apply the principles in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344. Here Counsel for the respondent argued that the two most important of the considerations referred to in the cases were that the applicant had failed to given acceptable explanation for the delay in issuing the proceedings, and second that the respondent would suffer prejudice if an extension of time was granted. In relation to the explanation given by the applicant, Counsel for the respondent said that the applicant's solicitors had made a calculated decision not to issue the proceedings under the Act while they attempted to negotiate a resolution of the ERC proceedings. It was clear at all times that the solicitors for the applicant knew of the time limits under the Act. Proceeding without issuing under the Act was, in these circumstances, a calculated decision, and the applicant had given no acceptable reason why the application could not have been made. In fact the applicant did give a reason why the application was not made at that time. It was given by Mr Stynes and was on the basis that the applicant did not want to inflame the dispute with the respondent and the decision was taken at that point to pursue the ERC proceedings. While in the face of a short limitation period this might be seen to be a tactically risky course of action, in the circumstances where the applicant sought a negotiated reinstatement to his position, it was not an unreasonable course of action. I am satisfied then that it cannot be said that the applicant has given no explanation for the delay that has occurred. The other central ground on which the respondent relied was that it will suffer prejudice if the extension of time is granted. The prejudice arises out of the fact that the respondent, because of the late notice that it received of the withdrawal of the ERC proceedings, was forced to prepare for those ERC proceedings and to incur significant legal and administrative costs up until 20 December, when it was advised that the applicant intended to withdraw those proceedings. It was said that those legal costs, which ran into thousands of dollars, and administrative costs, said to be of the same order, were factors of prejudice as well as factors going to whether or not the Court should exercise its discretion in favour of the applicant in these circumstances. Counsel for the applicant disputed that the respondent had necessarily incurred these legal costs thrown away. He put that the respondent would have incurred the bulk of the costs in defending both the ERC and these proceedings. It is to be noted that there was a conciliation conference in these proceedings scheduled for 19 December 1995. He further submitted that most of the costs would not therefore be thrown away. He did concede that some costs, of a limited quantum, were thrown away by the late withdrawal of the ERC proceedings by the solicitors for the applicant. There are two significant factors in this proceeding that cause me to grant the applicant an extension of time to issue his proceedings. The first is that the applicant at all times contested the dismissal. He issued the ERC proceedings at the earliest possible opportunity, namely 5 October. The respondent cannot have been in any doubt from that time on that the applicant was contesting the dismissal. In the light of the issuing of that application, it was not an unreasonable act for the solicitors for the applicant, seeking a negotiated resolution of the matter in the applicant's interests, not to issue the proceedings until at least the prima facie hearing before the ERC on 21 November 1995. I am satisfied there has been an acceptable explanation for the delay in issuing the proceedings until that time. A further significant consideration in relation to the exercise of the discretion here is the fact that I am satisfied that the respondent knew from the date of these proceedings that the ERC proceedings did not provide the applicant with an adequate alternative remedy under s170CD of the Act. See Liddell v Lembke (1994) 1 IRCR 466. From that time the respondent should have known that any action that it took to defend the ERC proceedings, when these proceedings remained extant, was liable to be thrown away. This became obvious to the respondent on 18 December when the solicitors for the applicant sought consent to the extension of time in these proceedings and to the discontinuance of the ERC proceedings. When the matter is looked at at the date of the issuing of these proceedings, the respondent cannot point to any real prejudice at that time. The applicant contested his dismissal at the first possible opportunity by issuing the ERC proceedings. He had solicitors seeking to negotiate a resolution of the matter. The respondent had not filled the position and cannot point to any particular prejudice for the 34 day period for which the applicant seeks an extension. I am not satisfied that the additional costs incurred by the respondent referrable to the discontinuance of the ERC proceeding, are a consideration which should weigh significantly here as either a discretionary consideration or as a ground of prejudice. Those costs were not incurred at the time he issued these proceedings, and the respondent always knew that the applicant would be seeking an extension of time. Given the factors of the contesting of the dismissal, and the short period of time, the approach of the court to the extensions of time of that order in comparable circumstances, the respondent, had it sought advice, would have most likely received advice that an extension of time would have been granted by the court. This case is clearly distinguishable from cases such as Turner's case (above) where the dismissal was not contested but time was extended. The delay is comparable to Coker-Godson (above) and much shorter than the unsuccessful Nelson (above) application. The decision in Brodie-Hanns v MTV Publishing Ltd (Marshall J, 31 October 1995, unreported) is distinguishable because the ERC proceeding was allowed to run to final order before the applicant brought proceedings under the Act. The applicant has contested the dismissal, he has given an acceptable explanation, and the respondent has not pointed to any relevant prejudice at the time these proceedings were issued. In these circumstances, given that this is remedial legislation, it is fair and equitable that the applicant's time be extended. The substantive application - Ms Gordon's evidence The applicant seeks a remedy after the termination of his employment on 4 October 1995. The events leading to his termination arise out of a tight credit policy operated by a supplier to the respondent, Eye to Eye. This supplier deals on 14 day terms, and the accounts receivable clerk was Ms Lois Gordon. Her job was to chase up moneys due from the respondent. Prior to September 1995 she had dozens of telephone conversations with the applicant. She has occasion to speak of him twice on Friday, 29 September. The second occasion was to do with a cheque for an invoice that was due on the following Monday. When she called, the applicant advised her that he would have to work at the weekend to do a cheque run for the accounts payable next week. She would have to do him "a big favour" for the cheque to be available on Monday. It was a "light hearted joking conversation". Ms Gordon said that she may have mentioned a box of chocolates or taking him out to dinner. She was unable to recall whether she mentioned sending him over a couple of samples of sunglasses. She recalls discussing it in her own office and deciding to send over a couple of samples. She explained that sampling is very common in the industry, and she felt under no pressure to send the samples: "It did not seem anything out of the ordinary". It was not for some special treatment from the applicant. Michelle Downes, the accounts payable supervisor of the applicant, gave evidence that before making a call on 29 September, the applicant had said to her "I'm going to see what I can get out of Eye to Eye". She said "like what?", and he replied "chocolates or lollies". She then heard the applicant arranging for the collection of a cheque, and saying "what's in it for me". Ms Gordon was not challenged in her evidence that the conversation between herself and the applicant was a "joking" conversation. The following Monday morning, 2 October, Ms Gordon contacted the applicant to ascertain whether the cheque was available. She was not sure whether she actually spoke to the applicant. When confirmation was received that the cheque was available it was collected by courier that morning. Ms Gordon also arranged for the warehouse girl at her office to send a couple of samples to the applicant. They were sent by courier in the afternoon run, some time around 12 noon or 1pm. The applicant rang Ms Gordon later that day to advise her that "he had been told by his superiors that he was not allowed to accept a free item. It was against company policy". He did not speak to Ms Gordon as to whether he would be able to keep the glasses. He was apologetic. Ms Gordon was unable to say whether it was in that conversation that she was talking to the applicant about "that he actually liked them and we could charge him for them". She said that there may have been a telephone conversation on Tuesday morning when he went away from the telephone after she had suggested "that if he was allowed to pay for them, would he want to keep them?" She was unable to say whether the conversation about paying for the sunglasses was either late on Monday or it was the Tuesday afternoon. It was then that arrangements were agreed that the glasses would be picked up, invoiced and returned to the applicant. The applicant suggested that they be picked up. Ms Gordon gave evidence that either on Monday or Tuesday when she arrived she had a message that the applicant had called her and she returned the call. She had a conversation with the applicant late morning or early afternoon on Tuesday wherein the applicant advised her that the glasses were still at the respondent. Ms Gordon gave evidence that after her conversation with the applicant, wherein she suggested that "if he were allowed to pay for them, would he be able to keep them", arrangements were made for them to be picked up on Tuesday afternoon. An invoice was also to be prepared that afternoon. A telephone call was received on Tuesday afternoon that the glasses were still at reception at the respondent. Her evidence was that arrangements were going to be made for the glasses to be collected by the girl in the warehouse on Wednesday. Early on Wednesday morning, Ms Gordon was telephoned by the applicant and advised that "he had been dismissed for receiving a free item". She was astounded, and after a number of attempts eventually spoke to Mr Lachimea to advise what had happened, and that there must have been some misunderstanding. The applicant's account. The applicant's account was not inconsistent with Ms Gordon's account. He confirmed the discussions on the Friday about a cheque due on the following Monday. He said that after the discussion on the Friday afternoon, wherein he says that sunglasses were mentioned, he had a conversation with his superior, the Group Financial Controller of the respondent, Mr Dominic Lachimea. He advised Mr Lachimea that he may be receiving a pair of sunglasses. Mr Lachimea had told him that this was a "kickback" and that unless it went through "proper channels" it could not be accepted. There was quite an extensive discussion as Mr Lachimea emphasised the importance the respondent attached to its policy on acceptance of gifts or gratuities. The first area where Mr Lachimea's evidence conflicted with that of the applicant in relation to the Friday afternoon conversation was whether the policy of instant dismissal in relation to breaches of the policy was specifically applied to the applicant if he received any gift or was just discussed in general terms. The applicant denied in cross-examination that Mr Lachimea had referred specifically to him. The other issue in dispute was that the applicant maintained that Mr Lachimea told him that if any gift was processed through "proper channels" it could be accepted. Mr Lachimea denied saying that on the Friday. He said that a "normal commercial transaction" was referred to on Tuesday. Mr Lachimea said the Friday conversation ended with him saying to the applicant words to the effect that "if they do turn up you know what to do". The applicant said that after this conversation he called Ms Gordon and told her he could not accept the sunglasses because of what he had just been told by Mr Lachimea. Ms Gordon said no such conversation occurred that day. I am satisfied that no such conversation occurred that day. On Saturday 30 September the applicant attended at the office of the respondent for a short time. He drew the Eye to Eye cheque and did some filing that had accumulated. He gave evidence he drew another cheque that was due on an account named Benjamin. The events of Monday 2 October. On Monday the applicant arranged to have the cheque to Eye to Eye signed. As was his practice he left it at reception to be collected by Eye to Eye. He believes he may have received a call from Ms Gordon in relation to it. He said that the sunglasses were not discussed in that call. On Monday afternoon he received a call from reception that there was a parcel for him. He thought it might be sunglasses. He brought them to his desk and opened them in the presence of Ms Downs and another accounts payable clerk, Mr Halle. These two witnesses denied this and maintained that they first saw the sunglasses on the applicant's desk. Mr Halle claimed that it was in the morning but both Ms Gordon and the applicant said that they were not delivered until the afternoon. Mr Halle gave evidence that he saw the sunglasses on the applicant's desk and the applicant offered him a pair. The applicant did not volunteer where they had come from and Mr Halle did not ask. The applicant's evidence was that he told Mr Halle that he would have to pay for them. Mr Halle denied he said this. He maintained that it was only the following day that this was raised by the applicant. Later that afternoon, Mr Halle felt that something was wrong about the sunglasses and brought them to the attention of his superior, Mr Roger Cook, the Treasury and Planning Manager of the respondent. Mr Cook said he would look into it. In paragraph 17 of his contentions the applicant claimed that after receipt of the sunglasses he unsuccessfully tried to contact Ms Gordon. The respondent's telephone logs indicate a 1min.16sec. call from the applicant's extension to Eye to Eye at 4.13 pm on Monday 2 October. On three occasions in cross-examination Ms Gordon said that she had a telephone conversation with the applicant on Monday afternoon. Ms Gordon said that soon after she believed that the sunglasses were delivered she spoke to the applicant. She said that she thought she had spoken to him on the Monday afternoon. In this conversation the applicant had told her that "he had been told by management he was not allowed to accept them". She said that this was only spoken about on one occasion. She said that after that there was a discussion about picking them up and invoicing them. She said she did not remember whether it was in the same conversation or whether that was the next morning. In one of her answers she was asked: When you spoke to Mr Attard after he had received the glasses he rang you at that point, did not he?---Mm. You have to answer? --- Yes. What did he actually say to you? Do you recall? ---He rang and thanked me for the glasses, but he was ringing apologetically to say that he could not accept them as he had been told that it was against company policy. Did he say at that stage that he would need an invoice if he were to keep them? ---That was my suggestion, I think, but, as I said, I do not know if that continued in that conversation, or whether I rang him back to suggest that. On Tuesday 3 October at about 9.30 am Mr Cook had a discussion with the applicant about the sunglasses. He asked the applicant whether he had obtained approval to release the Eye to Eye cheque the previous day. The applicant replied that it was due so he had sent it. Mr Cook asked whether the applicant had received anything in return and after some hesitation the applicant had said that he had received the sunglasses in return. Mr Cook told the applicant that he had to return the sunglasses and repeated it on a number of occasions. The applicant's attitude was that he did not want to return them. He maintained that they were only sunglasses. He refused to accept the fact that it was not right. Mr Cook had directed him to return them. The applicant had made no mention of his conversation with Mr Lachimea the previous Friday nor had he made any mention about paying for the glasses or an invoice. The applicant maintained that when he spoke to Mr Cook he had Ms Gordon on the other line and that he asked whether if she sent an invoice then that would be proper channels. Mr Cook denied this. The respondent's telephone logs record calls from the applicant's extension to Eye to Eye at 10.28 am for 1min. 21sec. and at 10.36 am for 36 seconds. Ms Gordon was unsure whether a conversation about sending an invoice and paying for the glasses took place on Monday afternoon or Tuesday morning and said it may have been a broken call or two calls. Mr Lachimea gave evidence that he was in and out of the office on Monday. On Tuesday morning the applicant came into his office holding a white envelope and said: "Look what I've just received." Mr Lachimea did not ask when he actually received them. He interpreted that he had just received them. He said that he was happy to see him come in because "after our conversation that we had on the Friday he was doing the right thing by coming in to see me". A short time later the applicant returned and asked "whether he could buy a pair because he needed a pair of sunglasses, and I told him I didn't have a problem with that but he had to send the pair that he had received ... back". Mr Lachimea assumed that there was only one pair and that the applicant had mentioned that he could buy a pair for 50 cents. "I told him I did not have a problem with him buying a pair of sunglasses but they had to be bought under a normal commercial transaction". In cross-examination Mr Lachimea said that had the glasses been collected as he had instructed on Tuesday afternoon, then the applicant would still be employed. The applicant arranged to collect 50 cents from Mr Halle. He rang Ms Gordon for her to arrange for the sunglasses to be collected by courier and invoiced. A 1min. 44sec. call is logged from the applicant's extension to Eye to Eye at 3 pm on Tuesday afternoon. Ms Gordon gave evidence that the girl in the warehouse of Eye to Eye in her presence received a call on Tuesday afternoon stating that the glasses were still at the respondent's reception. She said that arrangements were going to be made that the glasses would be picked up on the Wednesday to come back to Eye to Eye and be invoiced. Late Tuesday afternoon Mr Cook advised Mr Lachimea of his conversation with the applicant that morning. He also advised him that Mr Halle had been handed a pair of sunglasses on Monday. He also raised the "commerciality" of the applicant purchasing a $30 pair of sunglasses for 50 cents. He had been told about this that afternoon by the applicant. Mr Lachimea then formed the view that he had been misled by the applicant because the applicant had failed to bring the glasses to his attention immediately he had received them on Monday. He had been caught out by Mr Cook on Tuesday morning. Mr Lachimea ascertained that the applicant had in fact been at work on Saturday and had raised the Eye to Eye cheque. Further, it had not been released by Mr Cook. The applicant is dismissed Mr Lachimea agonised over the matter overnight. He saw the managing director of the respondent early the next morning and obtained his support for whatever action he might take in relation to the applicant. He had a meeting with the applicant early that morning. Mr Lachimea said he commenced the meeting : "I told him I was bitterly disappointed with him on what had happened regarding the sunglasses, and I said to him that, you know, he had lied to me and had changed the facts as to what had occurred. And basically he said to me he hadn't, you know, he hadn't lied nor had tried to change things that, you know, as soon as he had received the sunglasses he came in to see me." The applicant had replied that he could not understand why Mr Lachimea was angry with him. He had "done the right thing", saw him after he received the sunglasses, "knew he could not keep them", and "arranged to send them back". Mr Lachimea had asked about the Friday conversation and the applicant had replied that, "yes ... you would lose your job if you receive kickbacks". He then asked the applicant whether he was sure he had received the sunglasses on the Tuesday. The applicant had replied, "yes", and Mr Lachimea had asked him how did he explain offering a pair to Mr Halle on the Monday. The applicant appeared stunned and asked how Mr Lachimea knew. He had also asked the applicant why the applicant had only processed the Eye to Eye cheque on Saturday. The applicant had replied that there was work to do. Mr Lachimea then asked if anyone else had spoken to the applicant on Tuesday. The applicant said "no", and Mr Lachimea referred to the argument with Mr Cook and the applicant's failure to mention their own Friday conversation to Mr Cook. Mr Lachimea had then said to the applicant that he had no intention of telling him about the sunglasses and he had come to see him because he was caught out on the Monday. He further said he could not understand why he had sought to implicate Mr Halle by giving him a pair. He told the applicant that given the Friday discussion regarding kickbacks he had no choice but to fire him. The applicant said he never thought he would lose his job over a pair of sunglasses and that he knew he had done wrong. The applicant had been allowed to ring his father and was offered the opportunity to resign. The applicant's version of this conversation was much shorter. The only common ground was that both parties agreed that the applicant had denied any intention to keep the sunglasses. Findings. The respondent's contentions of fact state that the applicant, in breach of a policy, on 2 October accepted two pairs of sunglasses from Eye to Eye. They state that he was aware that the acceptance of a gift was in breach of the policy and would be grounds for dismissal. Mr Lachimea's reason for the dismissal was: "The reason was that on - the only reason why (the applicant) had come to me on the Tuesday to tell me that he had received the sunglasses was because he got caught out by Roger Cook on Tuesday morning. That is what you inferred? --- That is correct. He had all the opportunity on the Monday to come and see me. If he really was going to send them back he wouldn't have offered the pair to Lance (Halle) on the Monday. He would have come straight into my office and left them. If I wasn't in the office he could have left them on my desk, Dom, guess what I have just got? But no, he goes and offers a pair to Lance. Lance lets Roger (Cook) know that afternoon. Roger speaks to me on the morning, on the Tuesday morning, and they argue about why he - he argues with Roger why he couldn't keep the sunglasses... He still had every opportunity on the Monday, he had every opportunity on the Tuesday and he had every opportunity on the Wednesday to tell me what exactly had happened... I formed the view that on the Monday, yes, he had accepted the glasses. And on the Tuesday he was back pedalling because he got caught out by somebody else, and therefore he had no other choice but to come and see me. The respondent had a clear policy against receipt of gifts and gratuities (Exhibit R13). In the event of any such receipt they are to be referred to management. The policy reads "We are proud of our relationship with our suppliers and therefore it is understood that small tokens of goodwill may be exchanged on special occasions such as Christmas." The policy concludes that any gratuity "will be reported immediately to senior management, who will determine the action to be taken with the individual or company involved." Here I am satisfied that the applicant, in a light hearted conversation with Ms Gordon on the Friday before the Grand Final, solicited from her a favour for having a cheque ready on the following Monday. The cheque was due that day. It was the applicant's own fault that he had to work on the weekend to meet the supplier's terms. The applicant's evidence was that due to his own work pressures he had to work on Saturday. I am satisfied that the applicant mentioned something along the lines of chocolates. Ms Gordon proffered a couple of pairs of sample sunglasses. I am satisfied that at that stage on the Friday afternoon no quid pro quo arrangement was reached. It was only a possibility. Ms Gordon said "sampling" was common in the industry. What she suggested was "nothing out of the ordinary". She felt under no pressure. The applicant then went to his manager, Mr Lachimea. They had a good relationship. There was mutual trust between them. Mr Lachimea then told the applicant that the receipt of anything from a supplier would be a kickback that would result in dismissal. The conversation went for some time. The applicant says there was a reference to "proper channels". Mr Lachimea denies this but on this point I accept the suggestion that "proper channels" was raised. I find that there was no telephone call by the applicant to Ms Gordon after this conversation. The applicant came in the following day, raised the cheque for Eye to Eye, as he has undertaken to do, and did some filing. On Monday 2 October I am satisfied that there was communication between the applicant and Eye to Eye to indicate that the cheque was ready. Prior to that the applicant had the cheque signed by Mr Cook and Mr Lachimea. The respondent had a system to control the release of cheques to meet cash flow requirements. Mr Cook and Ms Downes are responsible for it. Ms Downes was unable to say whether she had authorised release of that cheque. The applicant's evidence was that he thought he had obtained authority to release it. The evidence of Ms Downes was that cheques are released when payments are due. The Eye to Eye payment was due, in the terms of their credit arrangement, on that day. Even if the applicant did not obtain authority for Ms Downes to release the cheque I am satisfied that this was a minor irregularity because the payment was due on that day in any event and the cheque would have been released to meet the respondent's credit terms with Eye to Eye. Between 12 noon and 1 pm two pairs of sunglasses arrived. I do not accept Mr Halle's evidence that they arrived earlier that morning. I accept Ms Gordon's evidence that the courier left around noon. I am satisfied that the glasses were placed on the applicant's desk by him. They were observed there by Mr Halle and Ms Downes. I find that during the afternoon Mr Halle had a conversation with the applicant regarding the glasses. I am satisfied that the applicant offered him a pair but said to him that he would have to pay for them. Mr Halle's evidence that the applicant just gave him a pair without any discussion as to their origin or a reason lacked conviction. In assessing whose version to accept on this point I take into account that the applicant had been told in no uncertain terms the previous Friday that kickbacks were not acceptable. It is in this context that I am satisfied that at 4.13 pm that day the applicant telephoned Ms Gordon to advise her that he had spoken to management and could not accept the sunglasses. This is a central and critical finding. It is based on the evidence of Ms Gordon and the respondent's own telephone logs. The scenario that the telephone calls relating to the glasses only commenced on Tuesday morning, after the discussion with Mr Cook, leaves the Monday afternoon call unaccounted for. Unless the applicant was completely stupid and took in nothing of the conversation with Mr Lachimea on the Friday, it is more likely than not that at a time soon after the glasses arrived, he would, fixed with Mr Lachimea's attitude, have contacted Ms Gordon. He did that on the Monday afternoon. Another way to account for the telephone call was that it was to place a message to Ms Gordon that she contact the applicant. On her evidence she said she did return a call of his on Monday or Tuesday. The important matter, however, is that any contact by the applicant with Eye to Eye before the conversation with Mr Cook on Tuesday morning is consistent with the applicant not at that stage finally accepting the sunglasses. It is inconsistent with the acceptance of the sunglasses which is at the base of the decision to dismiss. It was the respondent's submission that the glasses, being a gift, had in breach of the policy been accepted before that in any event by the act of the applicant in handing a pair to Mr Halle. I do not accept that submission. To rely on this action alone to found an argument that the policy had been breached, or indeed that the applicant had disobeyed a lawful order that Mr Lachimea had given on the Friday to return the glasses, is strained. So is Mr Lachimea's evidence that the glasses should have been immediately placed on his desk with a note on the Monday. I accept Ms Gordon's evidence that either in the Monday conversation or in one of the two Tuesday morning conversations with the applicant she suggested that the glasses be invoiced at 50 cents. I accept that it was the applicant's suggestion and insistence that they be returned to Eye to Eye. Early on Tuesday morning I accept that Mr Cook, who had had one pair of sunglasses brought to his attention by Mr Halle, said to the applicant that they had to be returned. I find that in the conversation Mr Cook inferred that the sunglasses were a quid pro quo for the cheque to Eye to Eye. I find, however, that the applicant did not accept this but replied that the cheque was payable on that day in any event. I am satisfied that Mr Cook told the applicant that the glasses had to be returned, and further that the applicant did not mention the Friday conversation with Mr Lachimea. Subsequently the applicant brought one pair of the glasses in to Mr Lachimea's office. He said, "Look what I have received". I am satisfied that in fact the applicant did not have the opportunity to see Mr Lachimea the previous day. Mr Lachimea conceded in his evidence that he was in and out of the office. He said he could not specifically recall seeing the applicant on Monday afternoon. Mr Lachimea did not inquire exactly when the applicant received the glasses, and assumed it was the Tuesday morning. In that conversation, Mr Lachimea told the applicant the glasses must be returned. A few minutes later, the applicant proposed to Mr Lachimea, and he agreed, that it was in order that the applicant purchase the sunglasses for 50 cents but they had to be returned to the supplier. This is a significant concession by Mr Lachimea and, in my opinion, reflects back on the Friday conversation. If there had been no discussion about "proper channels" in the Friday conversation, it strains credibility that Mr Lachimea would so readily agree to the invoicing of an item that on the one hand he is describing as a kickback that will result in instant dismissal, and on the other hand could be purchased for 50 cents provided it is returned and invoiced. The ready acceptance by Mr Lachimea of a proposal by the applicant that he purchase the sunglasses at a nominal amount on Tuesday suggests that it is likely that the concept of "proper channels", in contrast to kickbacks, was the subject of discussion on the previous Friday. This applies particularly given Mr Lachimea's evidence that the applicant, in their discussion about sunglasses on Friday, said he needed a pair. It is also significant Mr Lachimea conceded that had the sunglasses actually been collected on the Tuesday, as he had envisaged, and indeed as the applicant had been attempting, then there would have been no dismissal. This is a concession by him that the events that Mr Cook recounted to him on the Tuesday evening would have been regarded as water under the bridge had Ms Gordon kept her part of the overall arrangement. I find, on the basis of the evidence of Ms Gordon and the respondent's telephone logs, that at 3 pm on Tuesday the applicant contacted Eye to Eye to inquire as to when the sunglasses were to be collected. At Ms Gordon's instigation, the warehouse girl was to have done that the following day. I do not propose to make detailed findings on the final interview, except to find that Mr Lachimea prejudged the matter by his opening statement that he was "bitterly disappointed" with the applicant and that he "had lied" to him. Given their previous relationship of trust this put the applicant in an impossible position to respond to Mr Lachimea. He defended his actions but was forced into admissions by Mr Lachimea. I do not accept that he admitted that he knew what he was doing was wrong. Did the respondent have a valid reason for the dismissal? I propose to apply the decision Sangwin v Imogen Pty Ltd (trading as Carleton Custom Upholstery) (von Doussa J, 8 March 1996, unreported) in this matter. In that decision, which dealt with a dismissal for misconduct, von Doussa J applied the following comments from Bi-Lo Pty Ltd v Hooper (1994) 53 IR 224 at 229: "Where the dismissal was based upon the alleged misconduct of the employee, the employer will satisfy the evidentiary onus which is cast upon it if it demonstrates that insofar as was within its power, before dismissing the employee, it conducted as full and extensive investigation into all of the relevant matters surrounding the alleged misconduct as was reasonable in the circumstances; it gave the employee every reasonable opportunity and sufficient time to answer all the allegations and respond thereto; and that having done those things the employer honestly and genuinely believed and had reasonable grounds for believing on the information available at that time that the employee was guilty of the misconduct alleged; and that, taking in account any mitigating circumstances either associated with the misconduct or the employee's work record, such misconduct justified dismissal. A failure to satisfactorily establish any of those matters will probably render the dismissal harsh, unjust and unreasonable." The respondent has not satisfied its onus of proof in this matter for the following reasons. It has failed to carry out any proper investigation into whether in fact the applicant has breached the policy or indeed committed an act of gross misconduct. The policy itself is one that requires an assessment of each gift or gratuity. It allows for special occasions. Some may argue that the Grand Final is a special occasion. The policy is not, as maintained by Mr Lachimea, completely black and white. Here proper investigation required, at least, a discussion with Ms Gordon as to what she had to say about the sunglasses in the context of the ongoing commercial relationship between the parties. If samples are as common as she claimed in her evidence, then they could be seen as analogous to a box of chocolates. Further, given the central allegation is that the sunglasses were accepted, the applicant's conversations with Ms Gordon after the delivery of the sunglasses were material. It was Ms Gordon who suggested an invoice. It was the applicant who contacted her on at least four occasions after they were delivered. Next, the applicant had to be given an opportunity to respond to the allegations that were putting his job in jeopardy. Here it was unsatisfactory for Mr Lachimea, not having in a sense formulated any allegation, to commence his meeting with the applicant by saying he was bitterly disappointed with him and that he had lied. The applicant had been hopelessly prejudged. The applicant and Mr Lachimea had a good trusting relationship. In these circumstances it was singularly inappropriate for the interview to commence with a statement that the prior trust between them had been destroyed before the applicant had any chance to say a word. Had Mr Lachimea picked up the telephone to Ms Gordon before talking to the applicant, it is highly unlikely that he could have come to the critical conclusion that the applicant had accepted the glasses on the Monday. Had Mr Lachimea considered the question carefully, he may have found that he had in fact been unavailable on Monday after the glasses arrived. This may have explained why the applicant did not draw them to his attention until the Tuesday. It is significant that both pairs of glasses at all times remained with the respondent. Ms Downes knew about them. If the applicant, on Monday, had a state of mind to keep them for himself, why did they remain at his work station? Had the matter been properly investigated it is possible, if not probable, that the applicant's actions would have taken on an entirely different character. He may have been seen as acting inappropriately in handing a pair to Mr Halle. He may have been seen as acting with a belief, albeit mistaken, that something said by Mr Lachimea on Friday allowed employees to keep these types of gifts, provided some form of invoice was supplied. Further, I have real difficulty in concluding that the applicant has accepted the gift in contravention of Mr Lachimea's interpretation of the policy. On the basis of Ms Gordon's evidence, he could not be said to do so on the Monday. On the basis of my finding that he told Mr Halle he would have to pay for the sunglasses, he could not be said to have "accepted" that pair at that stage in breach of the policy. I am not satisfied that it can defensibly be said that the applicant has been guilty of misconduct. This applies even more given Mr Lachimea's evidence that no dismissal would have occurred had the glasses actually been returned on the Tuesday afternoon. When all this is combined with the failure of the respondent to investigate the events adequately, the failure of Mr Lachimea to properly formulate the allegations against the applicant, and to give the applicant a reasonable opportunity to respond to the allegations, it leads me to the conclusion that the respondent has failed to satisfy its onus of proof that it had a valid reason to dismiss the applicant on the grounds of misconduct. The comments of von Doussa J in Sangwin (above) about a "valid reason" are directly on point in this matter : "For such a belief to constitute a valid reason the employer must establish that the allegation was investigated as fully as the circumstances permitted, that the employee was informed precisely of the allegation, and that the employee was given a fair and full opportunity to respond, that is to defend himself or herself against the allegation. Unless these steps have been taken a belief held by the employer will not have the quality which could constitute the belief a "valid reason". The proper fulfilment of these steps will also cover, at the least, those which are now required of the employer under section 170DC...." I am satisfied that for the reasons as outlined in Sangwin (above) the respondent has failed to discharge its onus of proof under section 170DE(1) of the Act. Remedy. The applicant did not seek reinstatement to his position. It was submitted that an incident a few days later where the applicant, apparently in an intoxicated state, made various threats against employees of the respondent should be considered as one of the circumstances relevant to the exercise of the discretion to award a payment of compensation under section 170EE(2) of the Act. I do not accept that the widened statutory provision makes relevant in this case post dismissal events of this nature that are a sequelae of what I have found to be an unlawful termination of the applicant's employment. The applicant has had a generally satisfactory work history with the respondent. He has very substantial disabilities and this lack of occupational mobility make it highly probable that had the events of 4 October not occurred he would have remained in employment with the respondent. He has been unemployed since his dismissal. His losses then can be calculated to date as exceeding the maximum allowable compensation under section 170EE(4) of the Act. Six months remuneration for the applicant totals $10,735. I am satisfied that this is the appropriate compensation for the respondent's unlawful termination of the applicant's employment. MINUTES OF ORDERS THE COURT ORDERS THAT : (1) The time for making application is extended until 23 November 1995. (2) The respondent within 21 days of this date pay to the applicant pursuant to section 170EE(2) of the Act the sum of $10,735. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules. I certify that this and the preceding twenty-five (25) pages are a true copy of the reasons for judgment of Judicial Registrar Murphy. Associate: Dated: 18 July 1996 Solicitors for the Applicant: Pointon Grant Counsel for the Applicant: Mr D Burnett Solicitors for the Respondent: Corrs Chambers Westgarth Counsel for the Respondent: Mr D Staindl Date of hearing: 8, 9 & 17 July 1996 Date of judgment: 18 July 1996