Maude v Firefair Pty Ltd [1996] IRCA 465

DECISION NO: 465/96 IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 1269 of 1996 B E T W E E N: Kenneth John MAUDE Applicant A N D FIREFAIR PTY LTD Respondent REASONS FOR DECISION (delivered ex-tempore) 26 September 1996 PARKINSON JR This is a decision in relation to an application made pursuant to Section 170EA of the Industrial Relations Act 1988.("the Act") The respondent sells and services fire and safety equipment. The applicant was employed by the respondent as a sales and services employee in its country region. He was employed in October, 1995 and his employment was terminated by the respondent in February, 1996. There is some disagreement about the date of the termination of employment, however I am satisfied that the date of termination was Wednesday 7 February, 1996. The respondent contends that it had valid reason for the termination of the applicant's employment, that reason relating to the conduct of the applicant. In this regard the respondent relied upon the applicant's conduct in altering an invoice which he had produced in respect of a sale to a new customer. The circumstances of the sale were that the applicant, during his annual leave, arranged for electrical work to be performed on his domestic premises by a Mr Wallace and his apprentice electrician. Neither Mr Wallace or the apprentice were called to give evidence in the proceedings. During the course of conversations after the work had been completed the applicant says that Mr Wallace expressed interest in purchasing some fire extinguishers from the respondent. It is the applicant's evidence that agreement was then reached between the applicant and Mr Wallace that the applicant would provide him with the extinguishers and the value of that invoice would be set off against the amount charged to the applicant by Mr Wallace for the electrical work performed. The arrangement was also that the applicant told Mr Wallace that he would be responsible for payment on the invoice for the fire extinguishers. The respondent's evidence was that Mr Wallace had informed the respondent that the he was not responsible for the payment and that it was the applicant's responsibility. The applicant's evidence is that as a result of this arrangement he altered the invoice by removing the reference to cash sale and replacing it with account. The applicant had however already written across the invoice the word " paid " in response to the purchase initially being a cash sale. This entry was not deleted from the invoice, notwithstanding that the arrangements had altered and the invoice was to be payable on account. The invoice was sent to the respondent's head office by the applicant in about one week prior to the date of the termination of his employment. The discrepancy in the invoice came to the attention of the accounts supervisor and inquiries were made as to the account, and the alterations. These inquiries included, by telephone a discussion with Mr Wallace. As a result of the enquires the respondent was satisfied that the applicant had improperly processed the account, contrary to instructions and company policy. The respondent in this regard referred to an enterprise agreement, constituting the applicant's employment agreement (Exhibit R1), and in particular conduct identified in that document as being in breach of the employment contract and warranting termination of employment. An interview was conducted with the applicant on Wednesday, 7 February, 1996 at the applicant's premises. Mr Turner, the sales supervisor of the respondent and Mr Scott, a sales and service employee were in attendance. In the course of that interview Mr Turner raised the invoice discrepancy with the applicant and sought an explanation. The respondent's evidence is that the applicant acknowledged that he had altered the document and indicated that he intended to make the payment on the account. The applicant's evidence is that his explanation also referred to the arrangements with Mr Wallace. Mr Turner's evidence was that as a result of not receiving a satisfactory explanation for the alteration he terminated the applicant's employment and handed him a letter of termination dated 6 February, 1996. That document having been brought with him from Melbourne, the evening before. The respondent submits that the applicant was given adequate opportunity to explain his conduct and that no adequate explanation was forthcoming. The applicant says that Mr Turner by his demeanour was hostile and not inclined to listen to his explanation and that the substance of the matter put to him was that the applicant intended to steal from the respondent. Whilst I am not satisfied that the respondent has established that the applicant intended to deprive the company of the amount of the invoice and was thus guilty of theft, I am nevertheless satisfied that the respondent had a valid reason for the termination of the applicant's employment, based upon those matters about which it complained to the applicant regarding the applicant's conduct in respect of the invoice no. 502134. I am satisfied that the reason for the termination of the applicant's employment was generally his conduct in relation to the invoice and his failure to fully disclose the nature of the transaction. I am satisfied that this was a clearly expressed reason provided by the respondent to the applicant both in the interview on 7 February and in the letter of termination which referred to the various breaches of company policies relied upon by the respondent to terminate the employment without notice. Whilst the evidence suggests that the respondent drew conclusions as to the applicant's motive from the conduct of the applicant and the state of the material before it, I am satisfied that this conclusion was only one part of the reason for the termination of the employment, the principal reason or determining reason being the conduct of the applicant in dealing with the account other than in accordance with the procedures of the respondent. The applicant was intimately concerned in and had an interest in the transaction in which he was engaged with Mr Wallace, whether he initiated that transaction or not, and that interest was not limited to his obligations to the respondent as an employee. He had a personal stake in the transaction, in so far as it at least involved domestic work at his own premises. Such transactions, particularly where they are not expressly authorised, demand the greatest of probity in their conduct and the exercise of the utmost caution and discretion. In this case the applicant did not exercise that care or discretion. He took no steps to have the transaction authorised, nor to notify the respondent of the arrangement. Further when it came to the completion and tender of the relevant invoice documents he took no care to alter the document to accurately reflect the nature of the sale arrangements which had been made, either by deleting the " paid " notation or inserting his own name on the invoice in place of Mr Wallace. The transaction took place on 5 January, 1996. Whilst I appreciate the applicant's evidence that he was on leave until 17 January, 1996, it is clear that no steps were taken to pay the amount of the invoice at any time after the applicant's return to work and before the termination of his employment by the respondent. This latter matter is another factor which identifies the inappropriateness of the applicant's conduct in relation to the entire transaction. The respondent is entitled to assume it can rely upon the accuracy of the material which is provided to it by the applicant in respect of sales and in particular in respect of payments received. This is fundamental to the business of the respondent and the duties of the applicant in working as a sales representative for the respondent. The applicant's conduct in this regard provided the respondent with a sound, defensible and well founded reason for the termination of the employment, which was not capricious, spiteful or prejudiced. In this regard I have adopted the approach of his Honour Justice Northrop in Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 to the application of s170DE(1) of the Act. I am satisfied that the respondent did not contravene s170DE(1) of the Act. As to the operation of s170DC of the Act, I am satisfied that the respondent in attending at the applicant's premises, in identifying the reason for the attendance, together with the provision of the material it had in its possession and conduct complained of, complied with s170DC obligations. In this circumstance I am satisfied that the applicant knew what was alleged against him and that the complaint of the respondent included the manner in which he had conducted and dealt with the invoice to Mr Wallace. There has been no failure to comply with s170DC of the Act. As to the operation of s170DB of the Act, I have earlier in this Judgment found that the applicant had not conducted himself unlawfully. I am not satisfied that the there was in this case serious misconduct in the sense that would justify termination of employment without notice. The provisions of the enterprise agreement do not operate to override the obligations of the respondent arising from the operation of the Act. The issue in this case is whether the conduct of the applicant was such that the respondent could not reasonably have been expected to continue the applicant in the employment during the notice period. Such conduct must be grave in its nature. In this case, whilst I accept that the respondent had valid reason for the termination, that reason was based upon a matter which is not serious misconduct in the sense contemplated by s170DB of the Act. The applicant was entitled to two weeks notice of termination of employment or two weeks payment in lieu pursuant to s170DB of the Act. That is the sum of $ 808.08 and that is the sum which I order be paid. I certify that this and the preceding five (5) pages are a true copy of the reasons for decision of Judicial Registrar Parkinson. Associate : Paul Ferguson Dated : 26 September 1996 APPEARANCES Counsel appearing for the applicant : Ms. L. Fleming Solicitors for the applicant : Faram Ritchie Davies Counsel for the respondent : Mr. R. Ironmonger Representative of the respondent : Victorian Employers' Chamber of Commerce and Industry Date of hearing : 26 September 1996