DECISION NO:488/96 CATCHWORDS INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT- CONSTRUCTIVE DISMISSAL - whether EMPLOYMENT CONTRACT breached by employers conduct - whether requirement to pay WAGES IN LIEU OF NOTICE by employee upon NOTICE OF TERMINATION was a PENALTY. Industrial Relations Act 1988 s170EA Rheinberger v Huxley Marketing Pty Ltd (unreported, IRCA, Moore J, 16 April 1996). Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200 Slifka v J W Saunders Pty Ltd (unreported, IRCA, North J, 19 December 1995) Western Excavating (E.C.C.) Ltd v Sharp [1977] 1 QB 762 AMEU-UDC Finance Ltd v Austin (1986) 162 CLR 170. JONES v TCE MARKETING AUSTRALIA PTY LTD VI96/1177 Before: MURPHY JR Place: MELBOURNE Dates of hearing: 2 and 5 AUGUST 1996. Date of judgment: 10 OCTOBER 1996. IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI96/1177 BETWEEN: CHRISTOPHER ROBERT JONES Applicant AND TCE MARKETING AUSTRALIA PTY LTD Respondent BEFORE: MURPHY JR PLACE: MELBOURNE DATE: 10 October 1996 MINUTES OF ORDERS THE COURT ORDERS THAT: 1. The application under s170EA is dismissed. 2. The applicant pay to the respondent the sum of $9,000. 3. The respondent pay to the applicant the sum of $2,464.65. Note: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI96/1177 BETWEEN: CHRISTOPHER ROBERT JONES Applicant AND TCE MARKETING AUSTRALIA PTY LTD Respondent BEFORE: MURPHY JR PLACE: MELBOURNE DATE: 10 October 1996 REASONS FOR DECISION Did he jump or was he pushed ? This is a shorthand way of enscapulating the legal issue at the centre of this proceeding. The applicant asserted that for the purpose of jurisdiction under S170EA of the Industrial Relations Act 1988 ("the Act") his employment had been terminated at the initiative of his employer, the respondent. He further argued that in any event the respondent had repudiated his contract of employment. The proceeding also involves claims and counterclaims consequent upon and associated with the resolution of this central issue. Background The principal business of the respondent is the sales and distribution of GE consumer electrical products. The applicant from September 1995 was employed by the respondent as its National Sales Manager. For two years prior to that the applicant had been employed in a similar capacity as National Product Manager with another business, Ricoh, that then held the distribution rights for GE products in Australia. At relevant times Mr Paul Hill was the General Manager of the respondent. He also had some involvement with the applicant at Ricoh prior to September 1995. The distribution rights for GE products were assumed by the respondent from 1 September 1995. At issue in the proceedings were events over the period September 1995 to February 1996. It was the applicant's contention that a cumulative series of events over that period, particularly from November 1995 until 2 February 1996, and in particular what happened at meetings on 15 January and 2 February 1996, were such that his employment had been unlawfully terminated by the respondent. Events prior to 15 January 1996 Mr Hill recruited the applicant to join the respondent. In July 1995 the applicant signed a letter of offer (Exhibit A2) that essentially replicated the terms and conditions of his existing employment with Ricoh. One area where the letter did not reflect the real position was in relation to hours of work. They were specified as being from 9.00 a.m. to 5.00 p.m. but at Ricoh, and subsequently at the respondent, staff at the applicant's level were expected to and did work from about 8.00 a.m. to 6.00 p.m. It was the applicant's evidence that he regarded 9.00 a.m. to 5.00 p.m. as the norm but that anything above that "would go towards a favourable pay review" and he would be looked upon as "being a worthwhile employee of the company". During 1995 the applicant had a grievance about his salary. He had a number of conversations with Mr Hill about it. When he was offered the position with the respondent at his existing salary level ($54,000 p.a. plus car) he sought to negotiate with Mr Hill for the level to be raised to what he said was the industry standard for positions of that level ($70,000 - $90,000 p.a.). The applicant prepared a document (Exhibit A3) for Mr Hill outlining his reasons. Mr Hill did not accept the reasons but at that time prepared a series of performance objectives for the applicant (Exhibits A4 and A5) for the period from the commencement of the respondent's operation on 1 September until 31 December 1995. It was agreed between the two that the basis of a review of the applicant's salary at the end of 1995 or early 1996 would be how the applicant had performed in achieving those objectives. A particular responsibility of the applicant was control of the advertising budget. Dealers were rebated by the respondent at various rates and the applicant was responsible for controls and forecasting the budget. Mr Hill gave evidence that the issue was discussed between the two of them at meetings on 26 September, 18 October and 6 December. On 29 November 1995 Mr Hill gave the applicant a memorandum seeking information regarding an advertising budget over-run. In December, just before he went on leave, the applicant reconciled the outstanding advertising expenditure and ascertained that his previous estimate had been $40,000 too low. He told Mr Lockie, the Finance Manager of the respondent, and then went on leave. Mr Hill found out about this a couple of days later and was unimpressed. He followed up with a memorandum to the applicant dated 21 December 1995 (Exhibit A9) referring to a conversation a month earlier about the matter and stating that "at the time I stressed to you my annoyance at the lack of control". The matter was to be discussed on 15 January 1996. The meeting of 15 January 1996. The applicant returned to work after his Christmas break on 4 January. Mr Hill was overseas at that time but on 11 January sent the applicant a memorandum (Exhibit A10) seeking to discuss a number of issues on 15 January, the first day that he would be back at work after the vacation. The meeting was attended by the applicant, Mr Hill and Mr Lockie. It was the applicant's account that the meeting consisted of a tirade of abuse from Mr Hill in relation to his performance and the matters in the memorandum of 11 January. He complained that Mr Hill said that he wasn't a national sales manager's "bootlace", and he didn't have the respect of his subordinates. The applicant was criticised for his performance but when details were sought Mr Hill was not forthcoming. The meeting then turned to discuss the applicant's salary. Mr Hill told the applicant he was not putting in the commitment he needed to. The applicant had to work 12 hours per day. The alternative was for the parties to part ways. The applicant was told he would receive a written warning about the advertising budget and should go away and think about his options. In contested evidence the applicant maintained Mr Hill gave him this ultimatum : "if you come back to me and say you'll make the commitment and you're looking for another job, I'll know straight away, and believe me I'll slap another two warnings on you as quick as look at you and you'll be gone". Mr Hill denied asserting that he required the applicant to work 12 hours per day. He said that the meeting was to discuss the applicant's performance. It was not to dismiss or reprimand him but to fix the problem. He admitted that he raised the question of whether the applicant had the respect of his peers. He denied saying to the applicant that he did not have the respect of his subordinates. Mr Lockie's version of the meeting was vague. He admitted Mr Hill was upset and aggressive in the meeting but maintained that the applicant stood up for himself when the various items in the memorandum were discussed. He claimed Mr Hill handled the meeting well. Mr Lockie was unable to recall any reference to Mr Hill requiring the applicant to work twelve hours per day. He was of the opinion that Mr Hill explained to the applicant that the "professionalism required (in his job) needed to be improved". He said that there was reference that a "performance warning would be a natural progression from the non-achievement" of the matters raised in the memorandum under discussion. Mr Lockie said the meeting was left on the basis that there was to be a further discussion. Events on 2 February It was common ground that after the meeting of 15 January the applicant was to consider the matters discussed and revert to Mr Hill. In fact the applicant sought legal advice. In the meantime he continued to work as normal. The parties resumed their discussions about the applicant's future with the respondent on 2 February. On 2 February the applicant first had a meeting with Mr Hill and two sales representatives that reported to him, Messrs Dougherty and Madden. At the meeting Mr Hill raised a letter from a client (Exhibit A11) which indicated an apparent breakdown in communication between the applicant and his two staff. The applicant claimed that Mr Hill berated him in front of the staff and threatened to dismiss the three of them if their communication skills did not improve. The applicant said the threat was "a throw-away line" and he did not take it seriously. Mr Hill denied the comment and maintained that he told the three to sort out their communication problems. Mr Dougherty corroborated this aspect of Mr Hill's evidence, and in particular that there was no threat of dismissal to anyone. There was a second and critical meeting that day between the applicant and Mr Hill. The applicant, as a result of legal advice, was, unknown to Mr Hill, armed with a tape recorder. The Court thus has the benefit of a full transcript (Exhibit A12) of the conversation. The conversation commences with the applicant reviewing the meeting of 15 January and, in particular, Mr Hill's demand that the applicant work longer hours. The applicant described one of the options that they had previously discussed as "unless I put in more hours than I am putting in now and make that commitment then I should look for another job". Mr Hill replied "that's basically right". The second option was described by Mr Jones as "you know, you don't have me here". Mr Hill agreed that they were the two scenarios. The applicant told Mr Hill that he was not really interested in working twelve hours per day because he had different family priorities to Mr Hill. There was then a discussion about a compromise between the expectations of the two parties. Mr Hill said: "Okay, all we have to do is come up with a compromise between what I think is acceptable reward for efforts and what you think and if you are diametrically opposed then we probably do have to part the ways.... Okay if they're close we'll probably work that out okay. I don't expect you to work twelve hours a day okay what I do expect you to do right is to be far more in control of thing (sic) that you do." There was then discussion about the applicant's attitude to the job and Mr Hill's expectations of how he could better perform in his position. Mr Hill refers to sending the applicant on a course. The applicant seeks a pay rise but Mr Hill says he does not propose to give him a pay rise. Mr Hill then proposes that the parties discuss the matter at the end of March. He said : "At the end of March we'll have one of two conversations. One is that you have risen in my mind to a level where you deserve a salary increase okay or you and I will come to an agreement that its probable we're wasting both our times. I will make sure you have an opportunity to find a job. I will in fact let you stay here while you find a job and I will support you with a positive reference okay. Ah unless you are completely homicidal there is a third alternative. Okay so I'm prepared to do that. There's no six month trial or anything like that. Its two months - okay because one month is too short for a start off." Mr Hill proposes that if the applicant has "performed" or he has "seen a change" any pay rise will be backdated to 1 January: Hill: "Okay so if we come to an amicable agreement because I've seen a change you'll be back dated to January 1 so its good as the promise I gave you..........okay. If its two different management styles and you really don't comprehend what I'm talking about relative to what your expectations are...." Jones: "I think I comprehend what you are saying." Hill: "Na Na - That's the wrong word. If its ............ From what my mindset is and what your mindset is there's a big gulf. That's not meaning that your mindset is wrong and mine's right - We'll come to an agreement that we'll just part the ways okay. Because I'm not going to flinch on the targets and being pushy okay. Yes. Okay." Jones: "Okay that's reasonable." Hill: "I'll give you - I've held off doing it as I said but I'm going to give you a written warning - included in the warning will be a clear statement I've just made today..... By the way in the scheme of written warnings this is a polite one okay." The conversation continues with the applicant making reference to not having enough time to do things. Mr Hill responds by proposing to transfer parts of his workload to the NSW Manager. The applicant agrees. The parties also discuss the compromises that Mr Hill has to make to earn the salary he receives, and the fact that the applicant may have to make similar compromises if he aspires to the same thing. On a number of occasions Mr Hill invites the applicant to come back on Monday to discuss various matters that have been raised. The applicant replies affirmatively. The state of the employment relationship at 6 February 1996. The existence of the transcript of the meeting of 2 February allows firm findings as to what happened at both that meeting and that on 15 January. Indeed there is little dispute on the evidence. In relation to the first meeting I generally accept the applicant's version of events. I am satisfied that at that meeting Mr Hill criticised the applicant for his performance, particularly in relation to control of the advertising budget. I am satisfied that the discussions between the parties were in the context of a review of the applicant's performance for the previous four months and his request that he have his salary level increased. The discussions between them on 15 January were essentially bargaining. Mr Hill was seeking to extract the maximum commitment from the applicant in return for a revised remuneration package. The applicant was seeking to promote his claim to a salary increase. The most important consideration is, however, that nothing was concluded at that meeting. Further, it could not be said that Mr Hill on that occasion was seeking to immediately impose alternative terms and conditions on the applicant. The parties were negotiating about the future. Mr Lockie supports Mr Hill's evidence that the meeting ended with the applicant being requested to think about things and get back to Mr Hill. It may be said that Mr Hill is a tough bargainer. There was, however, no great inequality in their relative strengths. The applicant had twenty years experience in sales positions. As Mr Lockie said, the applicant stood up for himself in the first meeting. The transcript of the second meeting shows that he was also standing up for himself in that meeting. The applicant agreed he was expecting an admission by Mr Hill. He expected more of the tone of the first meeting but, as the applicant conceded, in the second meeting Mr Hill was conciliatory. He was offering the possibility of a course for the applicant. He was proposing to lighten the applicant's workload. The matter was to be reviewed in two months. At the same time Mr Hill was reserving his position in relation to the applicant's performance by refusing to increase the applicant's salary, and giving him a warning. The applicant's position in evidence was that the offer of a course and the comments made on 2 February were not genuine. He "believe(d) that if (he) had stayed there, (he) would have ended up with two extra warnings within a matter of months, and .... would've been out the door." He said that the "game was up" as of 15 January. He thought that on 2 February Mr Hill would have said "lets part the ways" when he told him he was not willing to work twelve hours per day. It was the applicant's evidence that he felt that he had no choice but to leave the respondent. He said he had been "abused from pillar to post". He said "I really and truly believe that what was going to happen was that two months go by, another couple of warnings go on, and I'm out". The applicant leaves. From the transcript, it appears the meeting of 2 February ended amicably. The position was to be reviewed in two months. The applicant attended at the office over the weekend of 3/4 February and prepared some figures. On 5 February he consulted his legal advisers and called in sick. On 6 February his solicitors sent the following letter (Exhibit A13) to the respondent : "Our client was employed pursuant to a contract of employment which, inter-alia, included terms and conditions that his work hours would be from 9 am to 5 p.m. week days and that this contract of employment could only be terminated by you on the provision to our client of two months written notice. Our client has repeatedly been compelled against this wishes to work hours and days well outside the terms of his contract of employment for which he has not been remunerated. In addition our client instructs that he has been subjected to repeated verbal abuses (sic) and threatened with "warnings" which have never eventuated and, most recently on 2 February, 1996 was threatened with dismissal in the presence of fellow employees. Such conduct is untenable. The unilateral alterations to our client's contract to his detriment constitutes a constructive dismissal..." Who terminated the employment? The applicant argued that the respondent's actions were properly characterised as constituting a termination of employment at the initiative of the employer for the purposes of the Act and at common law. The applicant argued that the course of action by the respondent showed that it evidenced an intention to no longer be bound by the contract and the applicant was entitled to accept the repudiation. The first matter relied on in the letter was the question of hours of work. The applicant in his evidence said that he willingly worked hours greater than 9 a.m. to 5 p.m. in the expectation of a favourable pay review. The applicant, before he commenced with the respondent, was working long hours and that continued until February 1996. By agreement the contract hours thus were not applicable. On the basis of the evidence, it cannot be asserted that the applicant "has repeatedly been compelled against his wishes to work" well outside the contract hours. On 2 February Mr Hill was proposing to reduce the applicant's workload to reduce the pressure on him. There was no ultimatum about hours in that meeting. The letter refers to "verbal abuses" and "warnings". This appears to be a reference to the meeting of 15 January and the first meeting on 2 February. On the evidence I am not prepared to find that Mr Hill abused the applicant. I accept that he was critical of the applicant. The evidence shows, however, that Mr Hill had grounds to criticise the applicant's control of the advertising budget. Mr Hill probably expressed himself forcefully but the applicant is an experienced middle level manager who, on Mr Lockie's evidence, stood up for himself. I am not satisfied that Mr Hill's manner of communication with the applicant was such that it made the applicant's position untenable. The same applies in relation to the issue of "warnings". I accept that the issue of a warning was raised in both meetings. I am satisfied, however, that Mr Hill had some basis to criticise the applicant's performance. The fact was that the issue of the control of the advertising budget had been raised a number of times before that. The discussion of a warning in the meeting of 2 February is in this context and is not to be characterised as repudiatory conduct by the respondent. Another matter relied on in the letter is that the applicant had been threatened with dismissal on 2 February. This is a reference to the meeting that took place that day between Mr Hill, the applicant and the two employees at which Mr Hill is alleged to have threatened everyone present with dismissal. There was no reference to this earlier meeting in the transcript of the second meeting that day. In evidence the applicant admitted that he did not take it seriously. Mr Dougherty, who was present at the meeting, denied any threat to anyone's employment. On the applicant's own evidence this threat was of little moment. In his contentions the applicant also relied on an incident in late 1995 where he alleges that Mr Hill disclosed to the NSW State Manager that the applicant was being paid less than him. Mr Hill denied that he had done this. In any event the matter is only briefly referred to in the 2 February meeting. Mr Hill explained the pay disparity on the basis that Mr Tamplin had been employed after the applicant and the latter's salary was to be the subject of review in early 1996 that was likely to have taken his salary above that of Mr Tamplin. Mr Hill denied telling Mr Tamplin that he was earning more than the applicant. Even if he did, the applicant appears not to have made a significant issue of it in either of the two meetings. I am not satisfied, in any event, in the context of the overall relationship between the parties, that this matter, alone or in combination with the others alleged, could be the basis to allege that the respondent has repudiated the contract. Conclusion : no termination or repudiation by employer. Whether the respondent terminated the employment or repudiated the contract must be considered in the light of the implied duty within all contracts for the parties to co-operate. It must also be seen within the mutual duty of fidelity and good faith implied in the contract. It must be considered from an objective standpoint. Here, all the respondent's actions were inchoate. Nothing was finalised. No ultimatum was given. The parties as at 6 February were still negotiating, albeit in a robust manner. It may have been that the parties were ultimately to have parted ways. It may have been that in due course Mr Hill may have dismissed the applicant or forced him to tender his resignation. The parties may have come to a mutual agreement that the applicant leave at a time that suited him. Mr Hill had foreshadowed all these as options. He had also intimated that the applicant could remain until he had obtained other employment. These were all matters to be the subject of a conclusive discussion at the end of March. That discussion never took place because the applicant jumped first. While the applicant no doubt felt that Mr Hill was stringing him out on a pay increase, he had a duty to persevere with the employment until Mr Hill took some action that showed that the respondent was at that time evidencing an intention to no longer be bound by an essential term of the contract. I am not satisfied that Mr Hill's actions up until 6 February could be so categorised. I am further not satisfied that it could be said that Mr Hill was engaged in "some action on the part of the employer intended to bring the employment to an end and perhaps action which would, on any reasonable view, probably have that effect" : Rheinberger v Huxley Marketing Pty Ltd (unreported, IRCA, Moore J, 16 April 1996). It also could not be said that this was a situation "where the employee d(id) not resign willingly, and, in effect, was forced to do so solely by the conduct of the employer": Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200 at 207. I have considered the application of the "contract test" as discussed in Slifka v J W Saunders Pty Ltd (unreported, IRCA, North J, 19 December 1995) but find that it does not assist the applicant here. I am not satisfied that there was conduct showing as at 6 February that the respondent was either guilty of a "significant breach going to the root of the contract"..... or showing "that the employer no longer intends to be bound by one or more essential terms of the contract": Western Excavating (E.C.C.) Ltd v Sharp [1977] 1 QB 762 at 769. The solicitor's letter of 6 February wherein the applicant terminated his employment does not, I am satisfied on the evidence before me, correctly characterise the legal position here. The respondent has not, for the purposes of the Act, terminated the applicant's employment. The applicant by force of that letter terminated the contract of employment. His legal advisers got it wrong. His application for a remedy under s170EA of the Act must be dismissed. The applicant had to give notice or payment in lieu. The applicant's letter of appointment (Exhibit A2) provides that: "Either party may terminate this contract of service by servicing two (2) month notice in writing with no reasons assigned or to pay to the party an equivalent amount of salary for the period." The applicant's solicitors' letter did not purport to offer two months notice as required. It sought to end the contract immediately. The respondent, by way of counterclaim in the court's associated jurisdiction, sought two months salary ($9,000) consequent upon this breach of the contract by the applicant. Unless the amount can be characterised as a penalty then the respondent is entitled to that amount. I am satisfied that the amount should not be characterised as a penalty but as a genuine pre-estimate of the losses consequent upon the termination of the contract of employment. The purpose of a period of notice is to allow each party to seek alternatives to the existing contractual arrangement. A period of two months is a reasonable pre-estimate of the time this might take, and the salary amount a reasonable pre-estimate of the cost involved. The amount cannot be characterised as penal as it is only payable upon a single breach of contract, namely the failure of either party to give the contractual notice of termination, and cannot be said to be "out of all proportion to the damage likely to be suffered as a result of breach": AMEU-UDC Finance Ltd v Austin (1986) 162 CLR 170 at 190 per Mason and Wilson JJ. In correspondence before the trial the solicitors for the respondent had sought to claim both two months salary ($9,000) and $13,625 damages for breach of contract. In opening, counsel for the respondent did not seek to press these cumulative claims and asked that the claim for $9,000 be deleted. In his closing address counsel for the respondent sought to press the two claims, but in the alternative. I am not satisfied that the applicant is prejudiced by allowing the respondent to press the claims in the alternative. The respondent's claim for damages against the applicant. The respondent led evidence that it had sustained expenses totalling $13,625 as a result of the efforts it took to cover the applicant's position from 6 February. I am satisfied that the respondent has proved this aspect of its claim. I disallow the claim, however, on the basis that the respondent has bound itself in the employment contract (Exhibit A2) to a pre-estimate of $9,000 damages in the event that either party terminates the contract. The respondent is entitled only to an order for that amount against the applicant. The applicant's claim for a bonus. The applicant claimed $1,800 being a bonus due to him under a scheme operated by the respondent. His evidence was that he delivered a memorandum to Mr Hill dated 11 January 1996 (Exhibit A14) recommending that eligible staff, including himself, be paid a bonus of ten per cent of salary even though the sales target required had not quite been achieved. Mr Hill's evidence was that he made no agreement with the applicant to this effect. He said that a bonus had in fact been paid after the applicant left the respondent and for reasons that included the extra work consequent upon that event. In support of his evidence Mr Hill produced a memorandum to the applicant dated 2 February (Exhibit R6) confirming that the applicant would not be receiving a bonus for reasons that included non-performance of the agreed sales target. The applicant denied receiving this memorandum. On this issue I prefer the evidence of Mr Hill that there was never any agreement to pay the bonus to the applicant. The issue of payment of the bonus was on the agenda for the meeting of 15 January, which was Mr Hill's first day back at work. Given the applicant's version that at the meeting Mr Hill was very critical of his performance, it seems unlikely that, in those circumstances, Mr Hill would have allowed the applicant a bonus when the target had not actually been achieved. Mr Hill's version is supported by a memorandum from Mr Lockie dated 9 January 1996 (Exhibit R11) which cast doubt on the applicant's sales figures in his memorandum of 11 January. It seems unlikely that Mr Hill would have approved payment of the bonus around 15 January when he was in possession of sales figures that showed that there had been a substantial under-achievement. It is more likely, as he claimed, that he asked the applicant to come back with some more detailed figures. Even though the applicant denied receiving the memorandum of 2 February, it has all the hallmarks of a contemporaneous document that supports Mr Hill's version of the events of 2 February. In the taped conversation the applicant is recorded discussing Mr Madden's bonus and saying "I even know what his bonus was and I didn't even get his bonus." All staff were to be on the same bonus so this supports Mr Hill's evidence that the issue of the applicant's bonus had not been the subject of any agreement by him. The applicant has not made out his claim for a bonus. The applicant's claims for accommodation, petrol expenses, and meals. The claim for accommodation relates to a sale of some televisions that the applicant achieved while staying at a motel in Dubbo on his way to Queensland on holidays. He said that Mr Hill had agreed to pay for petrol for the trip to Queensland as he was to undertake some business duties while in Brisbane and thus saved an airfare. Further, the applicant said that after he returned to work in January he mentioned the television sale and Mr Hill agreed that if a sale was effected then accommodation expenses would be paid by the respondent. Mr Hill denied both arrangements. Neither party provided any documentary evidence to assist resolution of this sharply conflicting account. On this issue I accept the applicant's account. It has a ring of truth. It is unlikely that these claims would be made up and submitted on the eve of his departure. First Mr Hill agreed that had he been asked to approve the petrol expenses, he would have done so. Given this, it is more likely that Mr Hill in fact approved both arrangements but they have slipped his mind. As far as Mr Hill was concerned it was business as usual between himself and the applicant prior to 2 February and thus it seems more likely than not that those items were the subject of approval without any issue being taken. The applicant has thus made out his claim for $258.86 petrol and $277.30 accommodation expenses. The applicant also made claims for reimbursement (Exhibit R7) of a number of incidental expenses for meals and parking totalling $164.49. Mr Hill claimed that the amounts were not payable as they did not conform to the respondent's guidelines. It was not put to the applicant in cross-examination that this was in fact the case. The applicant gave evidence that the expenses were incurred in the course of his duties and I accept his evidence on this matter. The respondent's claim to recover property from the applicant. The respondent claimed a number of consumer electrical products to the value of $1,932, that it said the applicant was in possession of and had failed to return. Two of the items, an answering machine (value $54) and a cordless telephone (value $114), were returned by the applicant. He denied being in possession of any other items. In particular he denied removing a VCR from his office. He further said that the other items that were recorded on the respondent's stock records had in fact been placed by him with various customers of the respondent in the course of his employment. I am not satisfied that the respondent has made out these claims. I accept the applicant's denial that he removed the VCR from his office. I also accept his evidence in relation to the other items. The stock records of the respondent were inconclusive and the applicant's account that the last he had seen of the various items was when he placed them with customers is a credible account that I accept. My findings in relation to each of the above items must now be reconciled against the applicant's accrued entitlements as set out in the letter of the respondent's solicitors dated 29 March 1996 (Exhibit A15). From the monies withheld I am satisfied that the applicant has made out his claim for expenses totalling $441.79, being $277.30 accommodation and $164.49 expenses (Item 4). He is also entitled to $1,764 being $1,932 withheld for various stock items less $168 for the two items returned (Item 4). He is also entitled to $258.86 for petrol (Item 5). These claims made out by the applicant total $2,464.65 and I propose to make an order that the respondent pay him that amount. I certify that this and the preceding seventeen (17) pages are a true copy of the reasons for decision of Judicial Registrar Murphy. Associate: Karen Halse. Dated: 10 October 1996. APPEARANCES Counsel appearing for the applicant: Mr R Niall Solicitors for the applicant: Felman & Associates Counsel appearing for the respondent: Mr M McDonald Solicitors for the respondent: Mallesons Stephen Jaques Dates of hearing: 2 and 5 August 1996 Date of Judgment 10 October 1996.