Industrial Relations Commission of New South Wales CITATION: Rimmer v Boltt International [2005] NSWIRComm 1158 APPLICANT Matthew Rimmer PARTIES: RESPONDENT Boltt International FILE NUMBER(S): 2154 of 2005 CORAM: Murphy C CATCHWORDS: Summary dismissal for alleged attempt to take customers away from employer - procedural fairness issues considered in context of Commission being satisfied that e-mail sent by applicant showed such intent to reasonable person - Commission declined to intervene. LEGISLATION CITED: Industrial Relations Act 1996 Pastrycooks Employees, Biscuit Makers Employees & Flour and Sugar Goods Workers Union (NSW) v Gartrell White (No.3) (1990) 35 35 IR 70 Hungerford J, CASES CITED: Rapp V Wauchope RSL HEARING DATES: 09/22/2005 DATE OF JUDGMENT: 11/04/2005 APPLICANT Matthew Rimmer appeared in person LEGAL REPRESENTATIVES: RESPONDENT Phillip Chaney appeared in person DECISION: - 9 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: MURPHY C 4 November, 2005 Matter No IRC 2154 of 2005 MATTHEW RIMMER AND BOLTT INTERNATIONAL Application by Matthew Rimmer re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION [2005] NSWIRComm 1158 1 The applicant was employed with the respondent as a sales manager organising commercial shipping freight. His employment was from 11th October, 2002, until his summary dismissal on 8th April, 2005, for alleged breach of fiduciary duty towards his employer. 2 Mr Rimmer's matter was the subject of hearing before the Commission on the 22nd September, 2005 at which the applicant represented himself and the respondent was represented by a principal of the company, Mr Phillip Chaney. 3 Mr Rimmer's dismissal took place on the 8th April, 2004 in a telephone conversation with the respondent's Mr Phillip Chaney. 4 The applicant testified that in the telephone conversation he had indicated to Mr Chaney that he was at a friend's barbecue at the time, when asked by his employer to explain an apparent conflict of interest indicated by the contents of a certain controversial e-mail which was submitted in evidence as an annexure attached to the statement of Mr Chaney, exhibit 3. BACKGROUND 5 The fatal e-mail is reproduced as follows: ----Original Message---- From: matt rimmer [maito:matt@boltt.com.au] Sent: Tuesday, 5 April 2005 11:14AM To: Steve Sinden; brogers@barryrogersco.com.au Subject: The Future Hi Gents Its like this. The backside has well & truly fallen out of the Intl. Removals industry due to massive increases to the PE ocean freight rates globally & I have decided that it is time to move back into commercial freight as it is now booming. My immediate problem is that nobody else at Boltt knows how to do the commercial stuff which creates a problem with the DVD work. I have already spoken to A Best about my intentions for the future and they have said that their business will always come to me no matter where I am working. I am sure Bali Garden will follow suit but I haven't spoken to them at this stage. FYI they have an additional supplier in Bali that Mike has just quoted on the ocean freight for & we will get this business too. (very good rate from Mike actually). At the end of the day I would like to chat to you both about the future of this account before I do anything else as you have been doing the work since the beginning. Please let me know if & when you may be able to talk further about the future of this account. Thanks & Regards Matt Rimmer 6 The applicant was accused in that 8th April telephone conversation of poaching those clients of the respondent named in the e-mail which had come into the possession of Mr Chaney. 7 According to the applicant, he advised Mr Chaney that he was not prepared to discuss the e-mail at that point, given that he was at a friend's barbecue, having partaken of alcoholic drinks and also because he was on sick leave with a broken foot, which had occurred in the preceding days. 8 Significantly, the respondent claimed that at this point, the applicant had become aggressive and had said to him that the customers named in the e-mail had belonged to him, and that he was free to deal with them as he thought fit. 9 Broadly speaking, the e-mail was interpreted as an attempt by the applicant to procure not only other employment with Barry Rogers and Associates, but to take with him the two customers known as A-Best and Bali Gardens, but also with the possibility of setting up a different organisation to rival the respondent. On that last point the applicant denied the conversation with another employee put to him by Mr Chaney that he had commented that all he would need was warehouse space to run his own business in the area. 10 According to the respondent in his statement to the Commission, and repeated in Mr Chaney's oral evidence, the e-mail constituted gross dishonesty and the applicant's conduct was serious, constituting gross disloyalty and a breach of duty in contacting "several of its customers and advising them of his intention to resign and to set up a business in competition with his employer". He further contended that the applicant sought to pursue those customers to divert business away from the Boltt entity and towards the competing business that he was planning to establish. Again, specifically, it was contended by Mr Chaney that the applicant had breached his contractual duty of good faith and fidelity; his fiduciary duties; duties under Section 182 and 183 of the Corporations Act 2001 (Cromwell); misusing information obtained; causing detriment to the respondent. The Applicant's evidence 11 The applicant told the Commission that the reason for the e-mail sent to Barry Rogers and Steve Sinden was a reaction to a meeting he'd had with the respondent shortly before the e-mail was sent, where the respondent in the person of Mr Phil Chaney and his son Colin Chaney, advised the applicant that he was to cease managing the Commercial Freight area and to concentrate upon the import and export of personal effects. The financial significance of this transfer of duties for the applicant was considerable in his evidence, which showed a loss of around $1,000 per month in commission. He also testified that the commissions earned on the personal effects ventures was miniscule by comparison, whilst involving the same amount of work - illustrating the point that the sending of a tea chest full of personal effects overseas required the same exertion and contacts as a forty foot container, which would attract much higher commission rate. In the process, and to add insult to injury, so to speak, he was required to train the son of Mr Chaney in the commercial freight business. 12 The applicant raised that evidence as an explanation and a vindication of the tone of his e-mail. 13 Perhaps more importantly, the applicant gave evidence in cross-examination when pressed by Mr Chaney, that the recipients of the e-mail, that is, Barry Rogers and Associates, were not a client of the respondent, but merely a service provider. Later in the proceedings it became evident that they also provided similar services to the two clients of the respondent named in the e-mail, A-Best and Bali Garden, which was a relevant connection to the reasons for dismissal. 14 The thrust of the applicant's evidence in relation to this was, that because Barry Rogers and Associates merely provided services as a licensed operator to facilitate the movement of goods through customs, the respondent was wrong in accusing him of poaching the customers A-Best and Bali Garden. He had merely advised Barry Rogers and Associates of his prospects for attracting those two customers of his employer. Again, in that context he emphasised that the only reason for such speculation was that he had separately advised Barry Rogers himself, that his employment appeared to be coming to an end at the instigation of Mr Chaney. 15 Although not described in this way, the applicant effectively asked the Commission to regard his e-mail to Barry Rogers as given in a fit of spleen and his references to his easy capacity to obtain the business of the clients of the respondent was merely a boast at this point as to what would likely happen if he left the employ of Boltt International. 16 Also troublesome for the applicant was the final paragraph of the e-mail, where it requested a conversation with Mr Sinden and Mr Rogers regarding "the future of this account before I do anything else". This was seen by Mr Chaney as a further indication of his intention to leave and open up in competition to his employers organisation. 17 The applicant asked the Commission, through his answers in cross-examination, to believe that this latter reference by him in e-mail was merely his expression of concern about the legality of the operation, which he wished to discuss, with the respondent, particularly in respect of the receipt of DVD material through customs. Later in his evidence, he clarified that alleged concern as being in relation to a possible breach of customs legislation which required the manifests for ships cargos to be advised at least two days prior to landing. He alleged that in some cases, material lay in the respondent's warehouse for up to two months before being declared, through customs. 18 A major contention of the applicant in his deposition and in his oral evidence was that his summary dismissal by the employer on the 8th April lacked procedural fairness, when he was denied the opportunity to explain the e-mail. As to the crucial dismissal conversation, the applicant maintained that he had rung the respondent when told to do so by Mr Chaney's son, Colin Chaney, whilst he was at a friend's place for a barbecue, adding later in his evidence that he had consumed some alcoholic drink, which led him to advise Mr Chaney senior that he was not prepared to discuss the matter in that environment, but would speak to him at work the next day. He maintained at this point, that Mr Phillip Chaney had said to him that he was not to come onto the premises and that he was dismissed forthwith. 19 Again, as previously indicated, there was a major difference between Mr Rimmer's evidence and Mr Chaney, with the latter maintaining that Mr Rimmer had become aggressive - stating that the two customers involved, that is A-Best and Bali Garden, belonged to him and that he would do what he liked in respect thereof. 20 Mr Chaney relied upon that response from the applicant as an admission of guilt and to justify refusing to discuss the matter prior to dismissing the applicant. 21 The applicant gave separate evidence that when he did arrive at work on the Monday, he spoke to Mr Chaney, but no negotiations occurred and he merely received an offer of two weeks pay in lieu of notice, together with a reference, in exchange for a resignation by the applicant. 22 The applicant claimed that he was denied his legally accrued entitlements of annual leave, on the basis that the respondent claimed an overpayment of commissions to him and refused to pay him those legal entitlements, which were claimed to be much less than the allegedly overpaid commissions. Final Submissions 23 The applicant provided the Commission with very brief submissions, which again repeated his assertion throughout these proceedings, that the e-mail which was annexed to the respondent's witness statement as annexure A, did not constitute a poaching of the respondent's customers as alleged by Mr Chaney. He repeated that there was no fair process offered to him in his dismissal and that the withholding of his legal entitlements on the basis of some argument in respect of commissions owed, was illegal. 24 He claimed that, had the respondent not reduced his position to his financial detriment on the morning of the 5th April, the e-mail would not have been sent by him. 25 He submitted that he was always prepared to negotiate with the employer in respect of the matter after his dismissal, but received nothing but total rejection from the respondent. 26 Mr Chaney 's submissions were more elaborate than those of the applicant, first pointing out that the e-mail was the central proof that the application intended to act to the employer's detriment in poaching clients - A-Best and Bali Garden. 27 At no time did the applicant provide a written explanation to the respondent. 28 He described the applicant's defence in cross-examination as a wishy washy attempt to confuse matters without any foundation. 29 The applicant was dismissed for one reason - that it was his intention to harm the business of the respondent. 30 The applicant had raised a series of red herrings in his cross-examination related to the supposed concerns for the legality of the respondent's operation to justify his comments in the e-mail, along with being the only one who knew the commercial business and the personal rapport which he claimed to have had with the clients named in the e-mail. The fact that he was able to perform a good job prior to the incident was irrelevant. 31 Mr Chaney denied any evidence of harassment of the applicant on the morning of the 5th April, and that he had simply asked the applicant to return to the duties that he had as of November, 2003, when the situation was changed by him as the employer in respect of the commercial freight work. Around that time, Mr Chaney had simply asked the applicant to refrain from smoking at the workplace as a favour to himself and others, and which took him away from his work station. CONSIDERATION 32 On its face the content and tone of the fatal e-mail made it less than surprising that Mr Chaney gave it the worst interpretation. 33 The essential weakness in the respondent's case was that, whilst he contended in final submissions that Mr Rimmer was dismissed for one reason - "the intention to harm the business of the respondent", his written deposition to the Commission cast the net much wider. In that area of his evidence, he specifically nominated and therefore must be taken to have relied upon the allegation that the applicant had attempted "to persuade, entice and divert Boltt's business". He also claimed that Mr Rimmer had attempted to "divert the business away from his employer Boltt to a vehicle that would financially benefit the applicant and financially harm his employer". The last aspect appears to have relied upon hearsay evidence of what another employee had said to Mr Chaney. 34 Mr Chaney went on in his written statement delivered under oath, to claim that Mr Rimmer was dismissed because of the e-mail "sent to a Boltt client", when in fact the e-mail was not actually sent to a client, but at worst the recipient was a service provider to the respondent - as well as to the two client's mentioned. 35 Also within Mr Chaney's contentions was reference to gross dishonesty and gross disloyalty. He develops that to embrace a list of breaches by Mr Rimmer, to include; (1) Contractual duty of good faith and fidelity; (ii) Fiduciary duties (iii) Duties under s182 and s183 of the Corporations Act 2001 (Cth) - misusing his position and information obtained as an employee for his own gain. 36 Mr Chaney relied upon the right of an employer to dismiss in circumstances where the employee has committed an act of serious and wilful misconduct for acts which do not require warning and justifies summary dismissal - well established by the employment law authorities, including those regularly affirmed and/or established by Full Bench of this Commission (See also Pastrycooks Employees, Biscuit Makers Employees & Flour and Sugar Goods Workers Union (NSW) v Gartrell White (No. 3) (1990) 35 IR 70 Hungerford J). Probably with some legal advice, his evidence included a research of relevant caselaw in that area, quoting authorities which again are familiar to this Commission's proceedings. 37 What was absent, however, from that brief but relevant traversing of those authorities justifying summary dismissal, was the shift of the evidentiary onus in such circumstances to prove matters alleged by the employer. Likewise, there are accompanying responsibilities upon the employer in these circumstances to have adequately investigated the matter at a proper standard of proof, albeit still the civil standard (refer Zheng Wang and Crestell Industries (1997) 73 IR 454). There is also a responsibility to provide a proper opportunity to defend the allegations, properly put to the employer, which is an aspect important enough to be highlighted within Section 88, subsection (b) of the unfair dismissal provisions. In simple words, the importance of basic natural justice is why procedural fairness is so often the subject of comment by the Full Bench of this Commission on the basis that it is not merely a matter of a legal technicality, or even nicety, but goes to the practical issue of whether there may have been a reasonable explanation for conduct, which on its face appears to deserve instant or summary dismissal. 38 In support of the applicant's case was that aspect mentioned earlier that the persons to whom he was communicating his disgruntlement and other more sinister overtures (having previously discussed with Mr Rogers) were not a customer as such. His unchallenged evidence was that Steve Sinden and Barry Rogers were merely service providers used for the processing of customers imports and exports, such as A-Best and Bali Garden. 39 However, some significance must be given to the fact that they were also service providers with Mr Chaney's two customers mentioned in the e-mail. Whilst Mr Chaney failed to enlighten me as to any implications, I should draw from that aspect, such as to whether Rogers and Associates could use their mutual dealings to influence A-Best and Bali Garden to give their business to the applicant, it is not irrelevant. Similarly, there was no proper clarification of the applicant's rapport with Bali Garden's principal by the name of Tim, except that it reinforced the capacity of the applicant to eventually poach them as clients. The fact that he did not after being dismissed is hardly concrete proof of anything. 40 The first part of the message appears fairly innocuous, except when coming to the words "I have decided to move back into commercial freight as it is now booming" (having just observed that the "backside has well and truly fallen out the Intl. Removals industry"). That can understandably be taken by a reasonable person in Mr Chaney's position to only mean that he would be doing the "move back" by leaving Boltt's employ, given that he had just been moved out of the commercial freight side of his existing employer's business. 41 Less certain from the evidence was how to interpret the reference to "my immediate problem is that nobody else at Boltt knows how to do the commercial stuff, which creates a problem with the DVD work". 42 The applicant claimed that he meant the delays ensuing from such incompetence, to the detriment of the customer. The Commission found that offering by the applicant to be less than convincing. 43 The next phase of the e-mail was more problematic for the applicant where he said; "I have already spoken to A-Best about any intentions for the future and they have said that their business will always come to me no matter where I am working. I am sure Bali Garden will follow suit, but I haven't spoken to them at this stage." Whilst the meaning of the remainder of that paragraph is less certain from the evidence, there is enough incriminating words from that quote (see added underling) that, again a reasonable person in the shoes of Mr Chaney would take the same way as the respondent did in dismissing the applicant. When combined with the preceding paragraph 34, containing the phrase "I have decided to move back into commercial freight….", there is again only one reasonable interpretation - that there was an expressed intention to leave the respondent. The reference then to the two customers can reasonably be taken as providing an intended springboard, especially the words "they have said that their business will always come to me no matter where I am working". 44 The explanation of the applicant that the final paragraph of the e-mail seeking to chat about "…the future of the account before I do anything else…" merely reflected a desire to discuss his concerns about certain breaches of customs regulations was unbelievable. The Commission's adverse reaction to that claim by Mr Rimmer was based upon the same reasons expressed by Mr Chaney from the bar table, i.e. that the applicant failed to venture that explanation in his witness statement and only offered it when pressed on cross-examination. I note also that the applicant failed to mention that aspect in his form 7A application, which was otherwise fairly comprehensive in the narrative offered to support the application. 45 The applicant made much of the summary manner of his dismissal over the telephone by the respondent. Moreover, when he offered to discuss the e-mail the following work day in the office, he was refused access at that stage by being told that he was dismissed. When he did in any event present himself at the office, the only concession offered by Mr Chaney was to allow him to resign with two weeks pay in lieu of notice. 46 An important piece of contested evidence from Mr Chaney was that the applicant effectively admitted his intention to poach clients by his aggressive response on the phone, claiming that A-Best and Bali Garden were his clients to do with how he pleased. This was denied by the applicant who claimed that he merely said that he wished to discuss it the next day at work (given he was socialising at a barbecue). If the respondent is to be believed on this point, I believe his case is reasonably conclusive, that the applicant was not only unrepentant, and justly dismissed for one of the most serious acts deserving of dismissal, involving a clear breach of fiduciary relationship and conflict with his employers essential interests. 47 Absent that piece of damning evidence, the applicant could easily be said to be dismissed without an adequate opportunity to explain himself, especially given the reliance by Mr Chaney, mentioned earlier, on matters found not to be established by the evidence or best described as an over-the-top response. The question then arises as to whether, if Mr Rimmer was able to offer the same explanation as he has sought to give before the Commission, that it should have stayed the hand of the respondent. 48 As canvassed earlier, the most significant defence offered in evidence was that Barry Rogers and Associates were not a customer, but a service provider. Accordingly, the Commission had to view what was said, in the context of the purpose of the making the comments in the e-mail. For instance, could they be considered as sheer boastfulness. But that does not account for the request to discuss the customer's account before he did anything else (which by reasonable inference was his stated intention to leave Boltt International). 49 There is another aspect of some concern. This arises from the material provided by the applicant attached to his Form 7A application. Paragraph 22 of that attachment, provided to the Commission at the outset of conciliation, although not quoted in the same terms at the hearing of the matter, I believe is a relevant consideration, when he did not disown or qualify it at hearing. The offending material reads thus: Para.22 "The e-mail reads words to the effect: I'm thinking of leaving. Couple of customers want to come with me , I don't know what I'm going to be doing, give me a call so we can chat". (emphasis added) 50 This was apparently Mr Rimmer's recollection of the offending e-mail and not a verbatim reproduction of the actual message quoted early in this decision - presumably because the applicant no longer had it available when making his application and to produce during proceedings before the Commission. There is a terrible irony in it however, for the applicant, in that there is an apparent acknowledgement with the words underlined by me of an intention to probably take customers away from his employer - i.e. more clearly contained in his recollection than what was actually espoused in the actual e-mail. 51 This was an additional aspect which I believe is difficult to ignore, but even aside from that revelation, the Commission finds that there is sufficient evidence of the applicant's perfidy as earlier analysed, to have justified his dismissal for serious and wilful misconduct. From hindsight then, I believe any shortcomings in procedural fairness in this case, even on the applicant's version of the telephone conversation of 8th April are secondary to the seriousness of an employee purporting to tamper with the client base of his current employer, even in the circumstances where he was understandably irate that his salary was about to be significantly reduced back to its original level by the loss of the commissions associated with the commercial freight work, from which he was being unilaterally removed upon his return to private international removals. 52 Moreover, I am unable to decide in favour of the applicant on the specific issue of whether he became aggressive and unrepentant in the phone conversation - claiming that A-Best and Bali Gardens were his clients to do with what he liked. 53 This was important, as already indicated, because if the applicant gave such an initial response, the lack of procedural fairness in denying him the opportunity to be properly heard in the office on Monday, before dismissing him, was much more understandable, if there was that initial lack of remorse, a display of arrogance and an effective admission as alleged by Mr Chaney. 54 As indicated, the shift of onus in such cases of summary dismissal might have meant that where there is a conflict in the evidence, such as on this point, and therefore the onus would fall against Mr Chaney to discharge. 55 Crucially, I have not been able to make that finding because of the somewhat careless evidence of the applicant on the specific areas already mentioned, where he was unconvincing in attempts to explain away apparent inconsistencies in his evidence, against what appeared from the e-mail. There were no such indications of a lack of credit involving Mr Chaney's evidence and I have therefore had to prefer his evidence over that of Mr Rimmer, especially in respect of what was said in the dismissal phone interview. 56 On that basis, I have declined to prefer Mr Rimmer's denial of being unremorseful and offering a defiant reaction in the weekend phone conversation on 8th April and also note that when he did have a conversation on the following Monday with the respondent, he failed to explain himself then, or at least gave no evidence of any specific words to satisfy Mr Chaney or this Commission after the event. 57 Whilst the manner of his dismissal left something to be desired, the serious reasons for his summary dismissal were sufficiently established to discourage any intervention by this Commission and I am supported in that stance by the findings of the Full Bench of this Commission in Rapp Vs Wauchope RSL in Matter No. 1893 of 1995 (Fisher P., Tabbaa and McKenna CC) which declined to intervene where the evidence likewise showed that the seriousness of the actions of the applicant were sufficient to put aside any shortcomings in procedural fairness. 58 I have accordingly declined to intervene in Mr Rimmer's dismissal and his application is accordingly dismissed. J P Murphy Commissioner 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.