Industrial Relations Commission of New South Wales CITATION: Birchall v Abacus Shade Structures and Abacus Tarps and Tents [2005] NSWIRComm 1041 APPLICANT Alexander John Birchall PARTIES: RESPONDENT Abacus Shade Structures and Abacus Tarps and Tents FILE NUMBER(S): 4191 of 2004 CORAM: Murphy C CATCHWORDS: Termination of employment - credibility finding against respondent witnesses - dismissal unfair even on respondent's version of events - respondent found to have unfairly dismissed applicant following his refusal to accept substantial deduction in his pay for Saturday overtime or to make up such time to cover error made by applicant - respondent also found to have victimised applicant under S.210(1)(e) and (f) of Industrial Relations Act 1996. LEGISLATION CITED: Industrial Relations Act 1996 CASES CITED: Australian Liquor Hospitality Miscellaneous Workers' Union v Randwick Labour Club IRC No. 110 of 1999, 19th April, 2000. HEARING DATES: 02/01/2005 DATE OF JUDGMENT: 03/24/2005 EXTEMPORE JUDGMENT DATE : 03/24/2005 APPLICANT Alexander John Birchall appeared in person LEGAL REPRESENTATIVES: RESPONDENT Eric Moonen appeared in person DECISION: - 18 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: MURPHY C Date of Issue: 24th March, 2005. Matter No IRC 4191 of 2004 ALEXANDER JOHN BIRCHALL AND ABACUS SHADE STRUCTURES AND ABACUS TARPS AND TENTS Application by Alexander John Birchall re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION EXTEMPORE 1 On 1st February I gave an ex-tempore decision in respect of the above application and the following represents that decision with some changes for the sake of completion, together with my Orders now handed down with the release of that decision. 2 The applicant was employed as a General Hand with the employer from 19th February, 2004 until his dismissal effective from 12th July, 2004. 3 Mr Birchall was told as the reasons for his dismissal that he could not be trusted as he did not own up to an error and offer to correct a mistake made by him when spraying certain wrong numbers on tarpaulins ready for despatch to a client of the respondent. His application, consistent with his evidence, also showed that he would not be paid for the time necessary to correct the error and that if he insisted on being paid as such, then "it was either the money or my job." 4 The letter of dismissal read as follows: "Tuesday, 6 July 2004 Dear Alex, We no longer require your services as we feel that we cannot trust you with a designated job and know that it will be done properly. Our concern also, is that if you do make an error you will not own up to it or offer to correct your mistake. The end result would be the product will be delivered to the customer and create considerable expense to Abacus, as well as loss of face to our customer. This is a risk I cannot afford, especially when this particular batch of tarps was destined for Queensland, to a client that has been with Abacus for nearly 20 years. Eric Moonen B.Sc Managing Director 5 The case for the applicant was progressed by evidence of the applicant himself; by his father, Mr Ken Birchall; and by Mrs Kathy Birchall, the mother of the applicant. The witnesses for the respondent included the respondent Mr Eric Moonen, his wife Beatrice Moonen and the company foreman, Jonathan Wilson. 6 To firstly summarise the case for the applicant; it was shown that he was employed for some five months fulltime with the respondent. 7 The attachments to his witness statement, exhibit 2,also showed him being paid a rate of approximately $380 gross per week. And on top of that was various amounts of overtime worked from time to time. Details of that overtime were taken during the hearing of the applicant's evidence. 8 On Saturday 27th June, 2004 the applicant had the task of spraying identification numbers onto each of the completed tarps, prior to despatch to the customer mentioned earlier. The evidence was that apparently a dozen of those tarpaulins were included in that batch. 9 The applicant's duties that day were to fold and stack the completed tarps, helping a senior worker with another job, and other general duties helping two other workers on what was described as the high frequency welder. 10 However at one point, the applicant discovered he had sprayed the wrong numbers on the 12 completed tarps. Realising his error, he approached the foreman, Mr John Wilson around 10am. The evidence of Mr Wilson was, I think, that it was 10.40am when he was approached by the applicant. 11 Mr Wilson told him to fix the mistake as quickly as possible and the applicant commenced immediately by rubbing out the wrong entries and applying the correct numbers. He was only able to complete two or three tarps in the short time available that Saturday because apparently other uncontested evidence shows he was accepting a lift back home from an employee by the name of Brian 12 On Monday the 28th, the applicant started at 6.15am, as his normal paid time, and commenced fixing the error. 13 The evidence of the respondent is that when he arrived on the Saturday to pick up some tools, he discovered the offending tarps stretched out and observed that there was some effort already made to correct the numbering error. 14 The respondent came in on Monday morning and asked what happened to the tarps which he observed on Sunday spread on the ground, and who was involved. 15 He asked who was in charge of the numbers and the applicant's evidence was that he put his hand up, saying it was he. That evidence is not seriously refuted by the respondent. 16 The applicant's important evidence was that the respondent came over to him and informed him that he was not getting paid for repairing the error to the tarpaulins. So that was on Monday the 28th. That evidence was not contradicted directly by the respondent. 17 On Tuesday, 29 June, the applicant's mother made contact with the Department of Industrial Relations and acting on that advice, the applicant on 30 June, approached the wife of the respondent who gave evidence here – Mrs Beatrice Moonen – in the office to ask what was happening in respect of his payment for the Saturday overtime. 18 Mrs Moonen advised the applicant that he would not be getting paid for the time that it took to repair the tarpaulins. At that stage, the applicant informed Mrs Moonen that he had contacted the Department of Industrial Relations and the advice from the Department given to his mother was that he should be paid for time worked. 19 Mrs Moonen informed him that the Award was merely a guide and that there were plenty of other things that were not in the Award. 20 The applicant at that stage testified that the respondent, Mr Eric Moonen, entered the office, asked what was being discussed, and said "there was nothing to talk about", that the applicant was losing the whole of the Saturday's pay, that is, three hours at time and a half and four hours at double time for which the applicant had been scheduled to receive $125 gross or $85 net, which the Commission has noted was worse than the original proposition that he should not be paid for the time spent fixing the numbers. 21 This was not directly challenged by the respondent, although indirectly there was a denial in respect of some related features throughout the respondent's case. 22 The reasons for dismissal were put into issue by the respondent when he repeatedly claimed that the reasons for the dismissal did not relate to a refusal to pay the applicant for the Saturday's overtime worked. Mr Moonen contended that the applicant was dismissed for failing to accept responsibility, the blaming of others in respect to the mistake he made, and that no remorse was shown or no effort was positively made by him to rectify the issue. 23 I must say at this stage that it was in the interests of the respondent to deny the key issue relied upon by the applicant, that he was dismissed because of his refusal to allow the deduction of his pay, especially as it was apparent that the Department of Industrial Relations had advised that payment should be made regardless. This had been confirmed directly to the respondent, later during the negotiation period between the parties. 24 Apparently by way of justification for his stance, the respondent also gave evidence that other employees had agreed to rectify such mistakes in their time in what he described as an ongoing (agreed) policy that if a mistake is made, according to the respondent, to offer that restitution be made or taken. One such instance quoted by Mr Moonen was the scratching of a motor vehicle by one employee. 25 On Thursday, 1 July the applicant gave testimony that he received his pay slip for the week which was to contain the Saturday overtime payment and found that it was omitted from his weekly pay. 26 The applicant again sought advice from the Department of Industrial Relations. This time the advice was to formally address the situation by presenting the employer with a letter of demand for the money owed. 27 Using the website offered by the Department and the template contained therein, the applicant produced a letter of demand which was served on the respondent on 5 July but was, according to the respondent, not received by him until the sixth. 28 That letter was attached to the applicant's witness statement in exhibit 2. It reads as follows: "To Eric and Beatrice Moonen. Letter of Demand. This is a letter of demand in relation to unpaid wages I am owed for working on Saturday, 26 June, 2004 between 4am and 11am. The amount owed is $125 consisting of three hours at time and a half and four hours of double time. I have been advised by the Department of Industrial Relations that you are in breach of the Award by withholding the monies owed to me, and it is on their advice I am writing to demand payment within the seven days of receipt of this letter. If the payment is not forthcoming, I will be lodging a dispute resolution with the Department of Industrial Relations. If you have any queries in relation to this matter, I advise you to contact the Department of Industrial Relations......" Signed by the applicant. 29 So following the issue of the letter of demand, the applicant gave evidence that he placed the letter on the desks of both Mr and Mrs Moonen. On Tuesday, 6 July he was called into the office by Mr Moonen who had by that time received the letter of demand and who wanted to talk about it. 30 At that discussion, the applicant testified that for approximately five minutes Mr Moonen asked him why he had given him the letter, stating that he didn't think it was reasonable that the applicant was not offering to work for nothing to correct the mistake made on the 12 tarpaulins. 31 In that conversation according to the applicant, the respondent told him how happy he was with the work previously carried out on tarpaulin repairs. At the end of the conversation however, the applicant testified he was given an ultimatum that if he did not withdraw the letter of demand, that he could forget about everything "or I could have the money owed to me but I would be finished up this week". 32 At this time, the applicant told Mr Moonen that he needed to think about the situation and was given until the afternoon to do so. 33 The applicant contacted his mother, informing her of what had happened. She advised him he could not be sacked in the circumstances, that he was entitled to both his job and his money for the day, and it was his right to be paid and still be employed. 34 The applicant also spoke to his father who himself then contacted the Department of Industrial Relations again, and received similar advice, i.e. there was no right to dismiss in the circumstances. 35 The applicant was approached that afternoon by Mr Moonen in the factory who, according to him, came with a handwritten letter stating that he had been dismissed. The applicant gave evidence of that letter being read to him. 36 The applicant told Mr Moonen he did not want to leave as he enjoyed working there, but he was entitled to his wages for the Saturday overtime that he had worked. 37 They then had an important discussion, according to the applicant, about compromise and again there was no direct evidentiary contradiction by the respondent to this conversation. According to the applicant, Mr Moonen made an offer to have the money taken out in smaller amounts over several pays. 38 Indeed, in final submissions, Mr Moonen referred to the fact that the applicant should have worked a half hour extra per day over a period but was, I must say, vague on that score. 39 The applicant made an important counter-proposal where he offered to pay a smaller amount based on the hours that he had actually worked to repair the mistake. 40 There was no agreement to the matter. He was asked what he wanted to do. He was told he had a chip on his shoulder. Then he was told that the respondent would type up the letter of dismissal already read to him. Later that afternoon, he was handed the letter of dismissal, set out at the beginning of this decision. 41 Evidence was given by the respondent as to the loss to the company by such errors of some $20,000 over a period of time. Appreciating that was claimed in rather loose evidence, it nevertheless was significant, if only to demonstrate that, according to the respondent, other employees had also apparently made a significant number of errors , albeit apparently "agreeing" to make restitution under the aforementioned "agreed" policy. 42 He also gave evidence of wanting to "nip the problem in the bud" as he used the expression by his treatment of the situation arising from Mr Birchall's mistake, and on the basis that there were too many mistakes being made within the organisation. 43 Curiously however, I must observe at this point that the foreman did not quite back up the evidence of Mr Moonen and gave evidence that the mistake was the first one made of that type, (at least by the applicant). There was no evidence given to the Commission by anyone of any other error being made by Mr Birchall in the five months of his employment. 44 The applicant goes on in his statement given under oath to maintain that that dismissal on the 6th July, 2004 occurred in the manner in which he had testified, that is that he was simply given the choice to forego his rights to payment for the Saturday or to keep his job with the company, which he believed was unfair. In his opening submission to this Commission, he claimed that his dismissal was therefore harsh, unjust and unreasonable. 45 The applicant also points out in his evidence that it was a mistake that he readily admitted, when asked by the respondent. Despite that immediate admission, he was accused of not being honest, and that he was being sacked for so-called deceit, now claimed by the respondent in his reply to the unfair dismissal claim. 46 As pointed out in the evidence, the letter of dismissal did not put that same accent upon matters. The letter of dismissal read earlier, talks about trust - this was repeated by the respondent in his evidence – and the need for jobs to be done properly. 47 There is reference in the second paragraph of the letter however, of the applicant's alleged failure to own up to his mistake. There is an absence in that letter of course, of another major charge relied upon by the respondent at hearing - that the applicant blamed others for his mistakes. 48 Both Mr and Mrs Moonen maintained in their evidence that the applicant had blamed both Wilson, the foreman and Daniel, the co-worker. 49 However, I must say at this stage that it was significant that in the evidence there were no convincing details given by the respondent as to exactly how the applicant was supposed to have implicated those other employees. Only the vaguest of assertions were made on this aspect. 50 Related to that issue, the applicant in his rebuttal statement, gave evidence denying that he had blamed others and explaining why he mentioned and why it was discussed with the respondent that others were present at the time. The gist of Mr Birchall's evidence on this accusation was that what he had said was limited to commenting that the factory manager, Mr Wilson, knew the numbers he was spraying and didn't stop him making the error. 51 He goes on to say, "It's true that John saw the number I was spraying on the first tarpaulin". He then talked about the limited involvement of Mr Wilson. I must say there is no intent in that statement to suggest that Mr Wilson was actually to blame, beyond the fact that he was factory foreman and didn't check the work of the applicant. 52 The evidence shows that Daniel, mentioned earlier, was involved in roping the same tarpaulins as the applicant, and assisting him in rolling them. Again, the evidence of the applicant is that his mention of Daniel was just simply that he was present at the time and also did not pick up the error either. 53 The applicant took serious issue with the dismissal for deceit, mentioned to him at the time and in refutation of that, attached to his application is a commendation from his school principal dated November 2003 which indeed is a glowing reference in terms of what can be expected from school principals who are noted for their selectivity in giving such references. When a school principal talks about "loyalty, respect and support of the school, fundraising for various charities", such a reference surely involved recognition of integrity and other fine personal qualities. 54 Whilst I appreciate such evidence is far from hard evidence of what someone might actually be like in the workplace, it reinforced me, along with the conduct of the applicant as observed by me in evidence, that he would most unlikely be a person who would indulge in deceit or the inordinate shifting of blame as claimed. 55 At the hearing of this matter, the respondent finally did not rely upon dishonesty of the applicant. It was acknowledged that the applicant made an honest mistake. Apparently acknowledging that the error was in fact the first made by the applicant. 56 In Mr Moonen's statement, he avoided or at least did not deal with the issue, of conversations between Mrs Moonen with the applicant, where the applicant says that he was told that he would not receive payment. The applicant's important evidence confirmed that on 30 June, through the conversation of Mrs Moonen, being interrupted by Mr Moonen saying there was "nothing to discuss", and going further to say that the deduction would go ahead for the overtime and for the whole day's overtime work - not simply rectification time. 57 The respondent relied upon the lack of contrition, the blaming of other workers, and as mentioned earlier, the failure to accept responsibility generally and the lack of remorse. 58 Over and over again, the respondent in his evidence, suggested that if the applicant had shown a willingness to participate in the rectification work – but I must say that the difficulty with Mr Moonen's evidence was that he was asking the Commission to come to accept a concept which was not only inconsistent with the applicant's plain and logical evidence of being told he was being dismissed for his insistence upon being paid for the Saturday overtime of 28th June, 2004, but his emphasis was simply unbelievable, as being so obviously a disingenuous and self-serving twist to the situation. 59 The evidence of the respondent that the applicant was dismissed for such matters as failing to accept responsibility and blaming others, no remorse, failure to take responsibility for what he did, and not offering some constructive suggestion. None of those issues were supported by any of the evidence, including that of the respondent. The evidence showed he was dismissed essentially because he refused to agree to sacrifice the whole of his Saturday overtime payment, as clearly evidenced from the dismissal letter's reference to Mr Birchall's not "offering to correct his mistake", which could only mean at his own expense. The applicant had indeed already begun rectification on the Saturday (observed by Mr Moonen himself as per his own evidence) and moreover stated again on the Monday. 60 The applicant was dismissed on the 6th July in circumstances where the evidence of Mrs Moonen showed that at some stage prior to the 8th July, advice was actually received by the respondent from the Department of Industrial Relations stating that the applicant should have been paid. Indeed, on 8 July the applicant was finally paid his money, apparently upon the respondent realising that the Department confirmed that the applicant was correct. 61 The amazing thing to me is that despite finally making payment, the respondent did not seek to resile from its decision to dismiss the applicant, and relied upon the grounds mentioned earlier. CONCLUSIONS 62 My first finding in this matter is that even on the respondent's version of events and reasons given for the dismissal, the applicant should not have been dismissed. It is reasonable to take into account the fact of the applicant's youth, and although the tasks he was performing on the tarps could be said to be quite simple, the transposition of figures from one to another can lead to errors. Dismissal for one instance of error would have to involve serious and substantial loss, amounting for instance to wilful neglect or even criminal negligence. 63 In most cases of incompetence, the decision to dismiss someone usually follows some warnings about their incompetence. There was a single incident for which the respondent asked me to believe that the applicant was justly dismissed, but claimed to be also about the failure to accept responsibility, blaming others, and no remorse. 64 But as indicated earlier, the respondent did not establish that the applicant actually blamed others, and contrary to the dismissal letter, he did immediately own up to the mistake and as already outlined, he did immediately start rectification work, except that he was not volunteering to work back at his own expense to make up the time loss. 65 The applicant should not have been dismissed. Perhaps he could have been warned about the incompetence when it took place and that if it ever happened again, disciplinary action might follow. 66 To deal more specifically with that, what the respondent failed to take into account, and which got lost in the subterfuge of reasons for dismissal launched by the respondent to justify its actions, was that the applicant did fess up to the mistake at the crucial time to the foreman, Mr Wilson, at around 10am on the day, thus ensuring the important customer in Queensland got the proper product. There was a chance perhaps that the error would not be detected for some time and in his young mind, the applicant might well have thought that he could just forget that it happened and hope for the best. 67 He did step forward to Mr Wilson and disclosed his error and whilst it cost the respondent, according to the respondent some seven or eight hundred dollars to rectify the error, the error was not of the magnitude to merit instant dismissal or dismissal for misconduct, as serious or wilful neglect. 68 In the case of summary dismissal or dismissal for cause, i.e. sufficient to merit dismissal for a single incident, the evidentiary onus of course shifts away from the applicant to the respondent. 69 Here there was a week's notice given. The applicant worked out that period. 70 The amazing thing, as mentioned already, is that the respondent did not resile from the decision to dismiss, particularly when he got his advice from the Department of Industrial Relations against forcing the deduction of the $125 for the Saturday's work. 71 For the reasons stated above, the applicant could not be said to have blamed others by any reasonable stretch of the imagination. Also, in that connection, he immediately put his hand up in answer to the respondent's enquiry on the Monday morning, and in reality, it seemed to be overlooked by Mr & Mrs Moonen or at least forgotten for the purpose of evidence, that the applicant himself was the one to notice the error and bring it to the foreman's attention at around 10am on the Saturday, 27th June. 72 As to the ongoing and so called "agreed" policy to allow deductions from employees pay - such a policy should cease immediately. As a general rule, an employer may not deduct moneys from the proper earning of employees. The Randwick Labour Club case decided by me in Matter No. IRC 110 of 1999 on 19th April, 2000, shows the inappropriateness of such deductions. In that case, it was established that there was no right of the Club to deduct shortcomings in the takings of the TAB section of the Club which had gone on for some years. 73 So on the question of credit, I intend to reserve my remarks for the release of this decision, suffice it to say at this point that, for reasons I have alluded to, I do not accept the respondent's evidence denying that he dismissed the applicant because of the refusal to withdraw the letter of demand, or because of his maintenance of the right to not have his pay deducted. It was beyond belief that the refusal to accede to the deduction was not the central issue. 74 I will also comment when I release this decision about the evidence of Mrs Moonen, which I must say, I did not find entirely satisfactory. 75 On the other hand, I have found absolutely no reason to doubt the applicant's credibility despite being tested in cross-examination. In short, I must say I prefer the evidence of the applicant to that of the respondent, and wherever it conflicted with that of the respondent, I have disregarded that of the respondent. 76 Which now brings me to the question dealing with circumstances where the applicant is to be believed and where his evidence therefore, where it contradicts the evidence of Mr Moonen, is to be accepted by the Commission. 77 The applicant was dismissed for one of the worst reasons. He was dismissed when he gave advice to the respondent in the persons of Mr and Mrs Moonen, that they could not deduct his pay for the time involved, upon advice from the Department of Industrial Relations. 78 I have held that his reference to others being present was understandable at the time. In particular, in those circumstances where there was a lack of evidence of any earlier mistakes, where there was evidence from Mr Moonen at least, of others making numerous of mistakes, and where the dismissal of the applicant relying upon the words of the dismissal letter were, "unjustified" for the level of the mistake made. 79 The dismissal of Mr Birchall was harsh, unjust and unreasonable in terms of Part 6 of the Industrial Relations Act 1996.. POSTSCRIPT TO DECISION 80 In the extempore handing down of the above decision I indicated that I might make further observations as to the indications of credibility of witnesses. I find it unnecessary to go into further particulars, of which there are many in the case of the respondent's testimony, except to generally comment that the aggressive approach by Mr Moonen throughout proceedings failed to dislodge the fundamental weaknesses of his case and his demeanour at the bar table and during cross-examination, where he continually indulged in speechifying and evasiveness, simply reinforced his lack of credit. 81 Mrs. Moonen was shown inter alia, to be an unreliable witness, especially when she appeared to shift her responses to suit the respondent's case and her major contentions were unbelievable, if not illogical. 82 One final note on the findings of credit of both the respondent witnesses, was that their testimonies were not assisted by the apparent efforts of Mr Moonen during her cross-examination to make inordinate eye contact with her and appeared to be attempting to influence her answers, which persisted even after being warned to desist. My findings as to credit however, do not need to rely upon those incidents. 83 One further matter which deserves comment relates to the Commission's finding, when handing down its decision extempore, that the applicant was dismissed for refusing to withdraw his legitimate insistence upon being paid for the overtime worked on Saturday 26th June, 2004. I found that reason to be clearly unfair, and it should now be said that the respondent, apart from anything else, appears to have offended Section 210 (1) subsections (e) and (f), the Freedom From Victimisation provisions; where they state: 210(1) (Reasons for victimisation) An employer or industrial organisation must not victimise an employee or prospective employee because the person: (e) claims a benefit to which the person is entitled under the industrial relations legislation or an industrial instrument, or: (f) informs any person of an alleged breach by an employer of the industrial relations legislation or of an industrial instrument. 84 In assessing the award to be made to Mr Birchall under Section 89(5), I have taken account of the evidence as to section 89(6) as I am required to do. ORDERS 85 Mr Eric Moonen, the employer, trading as Abacus Shade Structures and Abacus Tarps and Tents, is to pay to the applicant in Matter No. IRC 4191 of 2004, an amount equivalent to 20 weeks payment at the rate of $380 per week, which amount to $7,600. 86 If I am in error in naming Mr Eric Moonen as the true employer and in assuming that Abacus Shade Structures and Abacus Tarps and Tents is only a trading name, and not a legal entity capable of being the employer, having regard to the "slip rule", my Orders should be deemed to be against the actual employer, although not clarified in these proceedings. 87 Payment is to be made within 21 days of the release of this decision on 24th March, 2005. J P MURPHY Commissioner oOo DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.