Industrial Relations Commission of New South Wales CITATION: Sparks v Ashrafi Persian Trading Company Pty Ltd t/as Roslyn Gardens Serviced Apartments [2005] NSWIRComm 1171 APPLICANT Jason Matthew Sparks PARTIES: RESPONDENT Ashrafi Persian Trading Company Pty Ltd t/as Roslyn Gardens Serviced Apartments FILE NUMBER(S): 1268 of 2005 CORAM: McLeay C CATCHWORDS: Unfair dismissal - termination of employment - General Manager - dismissed without notice - whether warnings issued - whether witnesses were credible - conduct on last day of employment critical to question of fairness - loss of trust - reference issued - dismissal not harsh, unreasonable or unjust - application dismissed Industrial Relations Act 1996 LEGISLATION CITED: Annual Holidays Act 1944 HEARING DATES: 09/07/2005; 09/26/2005 DATE OF JUDGMENT: 10/28/2005 APPLICANT Mr P Hayward Haywards Solicitors LEGAL REPRESENTATIVES: RESPONDENT Mr J Boyle Boyle Associates Solicitors DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: McLEAY C 28 October 2005 Matter No IRC 1268 of 2005 Jason Matthew Sparks and Ashrafi Persian Trading Company Pty Ltd t/as Roslyn Gardens Serviced Apartments Application by Jason Matthew Sparks re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION [2005] NSWIRComm 1171 1 This is an application by Jason Matthew Sparks ("the applicant") for unfair dismissal against Ashrafi Persian Trading Company Pty Ltd t/as Roslyn Gardens Serviced Apartments ("the respondent") pursuant to section 84 of the Industrial Relations Act 1996. The application shows that Mr Sparks was employed as General Manager of Roslyn Gardens Serviced Apartments ("the hotel") from September 2004 until he was dismissed on 1 March 2005. 2 On the day prior to the dismissal, Mr Ashrafinia, Director of the respondent, had several discussions with Mr Sparks with the intention of leaving him with full responsibility for the operation of the hotel for the next six weeks while Mr Ashrafinia travelled overseas. Mr Ashrafinia said these discussions included warnings about the need to improve his performance. Specifically, he referred to too many days off, no medical certificates to support sick days, too many swapped shifts, rudeness to guests and lack of tact with other staff. He said that Mr Sparks made a strong commitment to carry out all his duties and "really perform" during his absence. 3 On the morning of 1 March Mr Ashrafinia said that Mr Sparks was late for work, he asked another worker to swap a shift with him, he shouted abuse at someone from the rear driveway of the hotel upsetting staff and guests, he telephoned the police to attend the hotel against company protocol, and denied having spoken to his work colleague in regard to the swapping of shifts. Mr Ashrafinia then decided that he could not trust Mr Sparks to run the hotel in his absence and terminated the applicant's employment. 4 Mr Sparks denied many of the complaints against him. While conceding a number of discussions had taken place about doing things differently, he said he had not been warned about his performance. 5 After dismissing the applicant, Mr Ashrafinia provided the following reference: To Whom It May Concern: I've been Jason M. Spark's employer at Roslyn Gardens Serviced Apartments. It was my pleasure to meet and get to know Jason. Jason has consistently met and often exceeds his job requirements, which includes meeting and exceeding forecasted budgets and full management of the motel. Jason is an enthusiastic, honest and dedicated employee with reliable work habits. Jason works without the need for guidance or supervision, but willingly accepts it when offered. He consistently works to improve his skills in any given task. Jason is always willing to pitch in to help the team, and he gets the job done right the first time. He is efficient in planning projects and punctual in meeting deadlines. I recommend Jason and wish him the best in any endeavour he chooses. If you'd like more information, I'd be happy to provide it. Please call the phone number below and ask for me by name. Sincerely, (signed) Mohammad Ashrafinia Owner Roslyn Gardens Serviced Apartments 6 Mr Ashrafinia claimed that the applicant wrote half the reference himself and that no prospective employer would be misled by it because of the instruction to ring, at which time the prospective employer could be given more information about the applicant. 7 In my view, it is unsurprising that the applicant made a claim for unfair dismissal, having been provided with such a complimentary reference the day after his dismissal. Even Mr Ashrafinia described it as a "glowing" reference. I do not read the final paragraph as an indication that any prospective employer ought to telephone the writer of the reference unless he/she requires any further information. In light of the evidence provided during these proceedings, I can take the reference to indicate one of two things: either Mr Ashrafinia planned to mislead prospective employers in order to minimise any negative financial impact on the applicant and therefore on himself or, if the reference is a true reflection of the applicant's qualities and the esteem in which his employer held him, the dismissal was harsh and unreasonable. I am forced to accept the former option. 8 Unfortunately, no other witnesses were called apart from Mr Sparks and Mr Ashrafinia against which the evidence could be tested where there was a difference between them. Because of the blatant contradiction between Mr Ashrafinia's verbal evidence and what he was prepared to put in writing for other purposes, when the evidence of the applicant differed from that of Mr Ashrafinia I usually preferred that of the applicant. The documentary evidence provided by the respondent regarding Mr Sparks' attendance at work proved to be a secondary document rather than a primary one and did not stand up to scrutiny when Mr Ashrafinia was cross-examined on it. In addition, I accept that Mr Sparks had not seen the diary notes in Mr Ashrafinia's handwriting prior to his dismissal. 9 However, I found also that Mr Sparks was not entirely credible. A number of times his testimony was inconsistent and often it was evasive. 10 I note that Mr Sparks was originally employed by Mr Amir Ashrafinia who subsequently reduced his involvement in the business. At the same time Mr Mohhammed Ashrafinia became more involved. The two brothers are the sole Directors of the respondent. (Except in this paragraph, all references to "Mr Ashrafinia" are references to Mr Mohhammed Ashrafinia.) 11 The terms of the appointment of Mr Sparks as General Manager were contained in an undated Employment Agreement which described his duties as being responsible for the overall management and control of the business. It described the hours of work as being 7.30am to 5pm four days a week and stated that the terms of the agreement could not be varied except in writing signed by both parties to the agreement. It was agreed, however, that some time after the commencement of the employment, the hours were varied by consent without having been reduced to writing. The Employment Agreement also provided for annual leave contrary to the terms of the Annual Holidays Act 1944. Clause 11, Termination of Employment provided for summary dismissal in cases including when the employee: 11.2.2 is guilty of any serious breach of faith, or serious neglect or default or wilful disregard of directions or serious professional misconduct or gross misconduct; 11.2.3 is in serious and fundamental breach of this Agreement and, after being previously directed in writing by the Company to remedy the breach, fails to do so within 14 days after the giving of the direction. The direction must specifically draw the attention of the Employee to this clause 11.2.3. 12 Mr Sparks said he had not received any verbal or written warnings during the course of his employment. The evidence included emails from Mr Ashrafinia to Mr Sparks written on 23 November 2004 and 2 March 2005. Mr Sparks denied that either of these was about a conduct or performance issue. My reading of the latter email is that it is critical of work requested and not undertaken, providing a deadline for that work - the preparation of a manual - to be completed. The email also referred to weekly reports requested but not provided. Mr Sparks conceded that it contained "constructive criticism". He said that he did not prepare the manual because he did not feel he had the total knowledge to write a manual for a system he was not familiar with, but that he had delegated the task to another staff member. 13 Mr Sparks said he was spoken to about his punctuality "one or two times". He "totally" agreed the day shift commenced at 8am, but disagreed that he was required to log in on the computer at 8am. He said he often attended to other tasks prior to logging in, so that the computer records of log-in times were not an accurate reflection of his starting time. He denied that he was ever instructed to log in as soon as he arrived at work. 14 In his affidavit evidence, Mr Sparks said: In relation to the suggestions that I was often late to work, that is not the case but I might add that I was on call 24 hours a day and considered that there was some flexibility in exactly what time I arrived at work. I might add that I was employed to do a job and rarely would I take a full lunch break. I took the view that this was swings and roundabouts and did not consider that in some way, not being at work at 8am amounted to a default on my own part. When questioned about this, Mr Sparks said: It's not saying it's flexible. It's basically saying that, yes, given that situation that I was on 24 hour per day call, I never thought on one or two or three occasions, if I did actually by change [ sic ], yes, call up late, I don't think anyone in this whole world gets to work exactly on time, sometimes there are hiccups. 15 The words quoted here provide an example of the circuitous responses given throughout Mr Sparks' cross-examination. I found his responses generally to be evasive and self-serving. As a result, I am not confident that his evidence was entirely reliable. 16 I am satisfied that Mr Ashrafinia expressed his concern about a number of areas of work performance including Mr Sparks' lack of punctuality, his manner of greeting guests and his non-attendance to particular tasks including preparation of a manual. I am also satisfied that, in spite of any shortcomings in Mr Sparks' performance, as at 28 February Mr Ashrafinia was satisfied to leave the business in Mr Sparks' hands during his six weeks' absence. 17 It follows that the events of the following day, 1 March, are critical in determining whether or not the dismissal was harsh, unreasonable or unjust. 18 Mr Ashrafinia said that on the morning of 1 March, Mr Sparks was again late for work, offering an excuse when confronted following a complaint by a client. Mr Sparks said he did not recall whether he was late for work on that day. 19 Mr Sparks and Mr Ashrafinia gave very different accounts of conversations on 1 March, including accounts of a telephone conversation between Mr Sparks and Ms Rosenberg, related to Mr Ashrafinia by Ms Rosenberg. At the time Ms Rosenberg was employed as a receptionist and cleaner at the hotel, and was promoted to the position of Manager following Mr Sparks' dismissal. While she did not provide a witness statement in these proceedings, the respondent relied on a signed statement from Ms Rosenberg attached to the amended Employer's Reply which was tendered in evidence by the applicant's representative. In this statement Ms Rosenberg supported Mr Ashrafinia's evidence about Mr Sparks attempting to swap shifts with Ms Rosenberg, requiring her to return early from her holidays to do so. Mr Sparks initially denied this, but admitted that he rang Ms Rosenberg, saying she then offered to swap a shift with him. When pressed, he said that he did ask her to swap the shift. Mr Ashrafinia said that when he confronted Mr Sparks with this information Mr Sparks denied that he had spoken to Ms Rosenberg. When asked in cross-examination about the conversation in which Mr Sparks reportedly denied having spoken to Ms Rosenberg, Mr Sparks was particularly evasive, although he finally denied that such conversation took place between himself and Mr Ashrafinia. Because of the corroborating statement from Ms Rosenberg, in this instance I accept Mr Ashrafinia's evidence rather than that of Mr Sparks. 20 Some plumbers working on the building next to the hotel had splashed water on to Mr Sparks' car. After shouting at them without the results he wanted, Mr Sparks called the police. Mr Ashrafinia said this was contrary to the hotel's policy, and gave it as one of the reasons for dismissal. He also said that one of the cleaning staff was so upset by Mr Sparks' behaviour that she did not want to work with him any more. Mr Sparks agreed that he had shouted at the workmen and called the police to stop them from damaging his car. 21 In answering a question during cross-examination, Mr Sparks said that the workman raised a baton and it was this that caused Mr Sparks to call the police. The baton was not mentioned in any of the written versions of the incident. The emphasis in all of Mr Sparks' versions of the story, including what he said he told Mr Ashrafinia immediately following the incident, was on the damage to the car which Mr Sparks had just had detailed. It is difficult to understand that anyone with real fear for his own well-being would first invite his employer to look at his car. I am concerned that Mr Sparks may have exaggerated some aspect of the incident to justify his action in calling the police. I do not believe that it was fear for his personal safety that motivated him to call the police. 22 There are other examples of Mr Sparks' evidence that give me cause to believe he gives the version of events that he thinks will best suit his case. There are several examples of inconsistencies in his testimony. One such example occurred when he said, regarding Mr Ashrafinia: "He was very annoyed with me, I was very annoyed with him too." A moment later when asked directly, "Do you have reason to believe that Mr Ashrafinia was annoyed with you at that time?", he answered "No." 23 Mr Sparks said he was given three reasons for his dismissal: personal emails, late close of reception and poor staff relationships. In Mr Sparks' view these were not sufficient cause for dismissal. 24 Mr Sparks said that his dismissal consisted of the following conversation only: Ashrafinia: "I don't think it's going to work out." Sparks: "What do you mean, it's not going to work out? What, are you terminating my employment?" Ashrafinia: "Yes." 25 This version of the conversation is inconsistent with the provision of the three reasons and is also inconsistent with Mr Sparks' description of the conversation as "short and sweet, five minutes, no more than six, eight, 10 minutes". I accept that there was a conversation which may have lasted about ten minutes during which Mr Sparks was given some reasons for his dismissal. 26 In his affidavit evidence, Mr Ashrafinia said he dismissed Mr Sparks because he lied to him about talking to Ms Rosenberg, that he attempted to swap shifts against his instruction and that he was in breach of clause 8, General Obligations and clause 11, Termination of his Employment Agreement. 27 I am satisfied that there was no direction in writing given to Mr Sparks in the terms set out in clause 11.2.3 of his Employment Agreement. As to how he breached clauses 8 and 11 of the contract, there was no specific evidence given. I am satisfied that Mr Sparks was given reasons at the time of his dismissal which were issues either not raised with him or not raised in such a way that would cause them to be accepted as disciplinary issues potentially leading to dismissal. 28 According to the employment contract, among other limiting factors such as a probation period and a restraint of trade clause, Mr Sparks was answerable to the Board of Directors. Mr Hayward submitted that this meant that Mr Sparks was not answerable to an individual Director. However, for all intents and purposes Mr Ashrafinia gave direction to Mr Sparks and Mr Sparks did not take any objection to this arrangement during the course of his employment. It was appropriate for Mr Sparks to continue to accept direction from Mr Ashrafinia. There was nothing in evidence to suggest that the Board could not delegate this function to Mr Ashrafinia. 29 In his final submissions, Mr Boyle for the respondent suggested that Mr Hayward had not satisfied the rule in Brown v Dunne in not putting his client's evidence to Mr Ashrafinia to refute. I must say he is wrong in this, as directions were issued which allowed Mr Ashrafinia every opportunity to refute any of Mr Sparks' evidence that was contained in his witness statement. The rules of procedural fairness were satisfied. 30 Despite the various contradictions, inconsistencies, evasions and untruths, I am satisfied that Mr Sparks' behaviour on the day of dismissal included asking Ms Rosenberg to change a shift with him, shouting abuse at workmen within earshot of staff and guests of the hotel and calling the police when it was clearly inappropriate. These things together were sufficient to cause Mr Ashrafinia to lose faith in Mr Sparks' ability to run the hotel in a suitable and professional manner during Mr Ashrafinia's absence overseas. It is reasonable to expect that a General Manager could and would run the business satisfactorily at all times. It was not unreasonable that Mr Sparks was dismissed when Mr Ashrafinia was given such grounds to cause him to lose trust in Mr Sparks' ability to fulfil his duties as General Manager. 31 Other issues between the parties went to: a) a claim that Mr Sparks owed Mr Ashrafinia money for a bicycle, which claim Mr Sparks denied; b) a claim that Mr Sparks removed certain wages records, to which Mr Sparks claimed that no such records existed; and c) whether the reference provided to Mr Sparks was issued under duress. None of these issues impacted on the fairness of the dismissal, so there is no need to comment further on them. 32 Following the dismissal, Mr Ashrafinia arranged to meet with Mr Sparks to discuss his outstanding entitlements, but did not do so. Mr Ashrafinia said he would meet and pay what was fair and reasonable, but he did not meet with Mr Sparks. He said that the meeting was with the accountant because Mr Sparks would be paid what he was entitled under law. Mr Sparks said the meeting could not proceed in Mr Ashrafinia's absence because the accountant was not sufficiently instructed. Any outstanding payments are outside the jurisdiction of the Commission as currently constituted and, as I understand, are subject to separate proceedings, so I will say nothing further on that topic. 33 As I have stated earlier, neither Mr Ashrafinia nor Mr Sparks were totally credible as witnesses in these proceedings. On careful reading of the transcript and exhibits, I am satisfied that the relationship of trust necessary in the position of General Manager had broken down. In the circumstances of Mr Ashrafinia's impending overseas travel, faced with Mr Sparks' behaviour on the day following the arrangements about Mr Ashrafinia's absence being put in place, it was necessary to act urgently and decisively. 34 I am not satisfied that the dismissal should have been summary dismissal as the terms of the contract setting out conditions for summary dismissal were not met. I note the contract provides for 14 days' notice to be given where it is not summary dismissal and where a period of probation has been completed, and it would appear that payment in lieu of notice has been paid. I note also that Mr Sparks was free to use the very favourable reference provided to him by Mr Ashrafinia. 35 I find the dismissal was not harsh, unreasonable or unjust. The application is dismissed. 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