Industrial Relations Commission of New South Wales CITATION: Wadowloska v Chantron Pty Ltd [2004] NSWIRComm 1110 APPLICANT Wanda Wadolowska PARTIES: RESPONDENT Chantron Pty Ltd FILE NUMBER: IRC 6279 of 2003 CORAM: Macdonald C CATCHWORDS: Unfair dismissal - termination of employment - summary dismissal - evidentiary onus to justify summary dismissal - alleged printing off of Respondent's customer and supplier lists for use in competition with Respondent's business - onus not properly discharged - absence of substantive basis - compensation awarded. LEGISLATION CITED: Industrial Relations Act 1996 (NSW) Pastrycooks Employees, Biscuit Makers Employees & Flour and Sugar Goods Workers Union (NSW) v Gartrell White No 3 (1990) 35 IR 70. CASES CITED: OutBoard World Pty Ltd (t/as Budget Waste Control Sydney) v Muir (1993) 51 IR 167 D an R Commercial Pty Limited v Flood (2002) 113 IR 344 HEARING DATES: 04/13/2004; 04/14/2004; 05/17/2004; 05/18/2004; 05/31/2004 DECISION DATE: 12/23/2004 APPLICANT Mr Jaloussis (solicitor) REPRESENTATIVES: RESPONDENT Mr Magee (barrister) DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES COMMISSIONER MACDONALD 23 December 2004 Matter No IRC 6279 of 2003 WANDA WADOLOWSKA v CHANTRON PTY LTD t/as ZUCCI Application by Wanda Wadolowska re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION [2004] NSWIRComm 1110 1 This is an application by Wanda Wadolowska ("the Applicant") for unfair dismissal against Chantron Pty Ltd t/as Zucci ("the Respondent") pursuant to section 84 of the Industrial Relations Act 1996 ("the Act"). 2 This matter was set down for Conciliation and Directions on 21 November 2003. The Applicant appeared and was represented by Mr Jaloussis, solicitor. The Respondent did not appear due to a confusion by the Respondent or her solicitor as to today's listing. Mr Jaloussis advised that correspondence from the Respondent's solicitor indicated that the matter was unlikely to resolve. The matter was set down for a Report Back and a nominal filing and Hearing program was put in place. 3 A Report Back was held on 2 December 2003. Mr Jaloussis appeared again. The Respondent was represented by Mr Hay, solicitor, who apologized for the non-appearance on the previous occasion. Conciliation was at an end and a filing and Hearing program confirmed. BACKGROUND 4 The Respondent operates a high fashion sales boutique in Double Bay. The boutique store is called: Zucci. The principal of the store is Ms Chantal Tosolini. 5 The Applicant commenced employment on 1 December 1997 and was employed as a full time sales consultant. Other staff were employed as casual sales consultants. 6 Ms Tosolini did not work in the boutique shop on a full time basis. For example, her business took her overseas to Europe on clothing buying trips for her boutique store. The Respondent had a data base of her suppliers and customers. 7 In September 2003, Ms Tosolini departed overseas for four weeks on a buying trip. Accompanying her was the casual sales consultant, Nicola Melick, who had had broken periods of employment with the Respondent. 8 On Wednesday, 22 October 2003, Ms Tosolini walked into the boutique shop around 5.30pm for an unannounced meeting with the Applicant who said she was accused by Ms Tosolini of printing off supplier and customer lists and of pushing Nicola Melick (the casual sales consultant) to assist the Applicant in setting up a business in competition with the Respondent. Ms Tosolini also named John Palermo (a Melbourne businessman) as assisting the Applicant in the business competition set-up. The Applicant denied the allegations. The Applicant was handed a letter by Ms Tosolini - dated 22 October 2003. The Applicant had been summarily dismissed. THE HEARING 9 The Hearing took place on 13 &14 April; 17, 18 & 31 May 2004. 10 At the Hearing, the Applicant was represented by Mr Jaloussis who called the following witnesses: (a) Wanda Wadolowska - the Applicant (b) John Palermo - proprietor/manager of a Melbourne leather garments store. (c) Mario Conti - husband of the Applicant. (d) Nassim Jelwan - the principle of an information technology business. The Respondent was represented by Mr Magee, barrister who called the following witnesses. (e) Chantal Tosolini - director of the Respondent. (f) Victoria Alice Melick - proprietor and partner in a South Australia fashion store. (g) Nicola Melick - employee of the Respondent and daughter of Victoria Melick. (h) Fay Gianoussis - employee of the Respondent. (i) Brett Collins - ex-husband of Nicola Melick. FINAL SUBMISSIONS For the Applicant 11 Mr Jaloussis, for the Applicant, submitted that the Applicant had been denied substantive and procedural fairness and sought the maximum compensation of six months pay based on the Applicant's gross earnings of $770 per week whilst in the employ of the Respondent. He stated that the Applicant had been summarily dismissed and therefore the Respondent carried the onus of establishing, on the balance of probabilities, that the Applicant had engaged in the misconduct for which she was summarily dismissed. The misconduct was that the Applicant attempted to entice a fellow employee, Ms Nicola Melick to go into business with the Applicant and that the Applicant had printed off customer and supplier lists for that alleged business purpose. Mr Jaloussis stated that the evidence showed that there were conflicting versions as to events that took place in this case. He urged the Commission to consider the inconsistencies that appeared in the Respondent's case; the evasiveness of the witnesses of the Respondent when being questioned; and bad memory lapses of the Respondent's witnesses. By contrast, he said, the Applicant had been forthright in her evidence. Mr Jaloussis submitted that the investigation carried out by Mrs Tosolini into the alleged misconduct of the Applicant was flawed. As well, he stated that the Applicant had been denied procedural fairness in respect of having no notice about that serious allegation of misconduct and denied the opportunity to respond to the same. For the Respondent 12 Mr Magee, for the Respondent, submitted that the Respondent was entitled to summarily dismiss the Applicant based on certain conduct by the Applicant. This conduct he said were acts inconsistent with the implied terms of her contract of employment, particularly the implied terms of fidelity and good faith and trust and confidence. He referred in that regard to the general principle that an employee cannot make use of the employer's time in a conscious and secret manner to advantage herself in setting up business in opposition to her employer. He said that the Applicant had printed off the Respondent's customer and supplier lists. Mr Magee said that certain allegations were put by the Respondent (Mrs Tosolini) to the Applicant at a meeting between them and the Applicant was given a reasonable opportunity to respond. Mr Magee submitted that the Respondent's decision to then summarily dismiss the Applicant was justified and that the Commission would find on the balance of probability, that the Applicant was guilty of the misconduct alleged. CONSIDERATION The Summary Dismissal 13 There is dispute between the witnesses as to some of the events leading up to the summary dismissal of the Applicant. The Respondent carries the onus of establishing, on a balance of probabilities, that the Applicant had engaged in the alleged misconduct and so the Commission, for present purposes, will give the Respondent's account of the events. 14 In late August, early September 2003, Ms Nicola Melick (casual shop assistant) again had cause to leave the employ of Zucci. Nicola Melick said she was prompted to leave the employ of Zucci for two reasons. One reason being an apprehended violence order she took out against a certain Russian man. Principally, she deposed, the reason was a note provided to her by the other casual shop assistant - Fay Giannoulis. The contents of the note went to Nicola Melick not cleaning up dishes in the shop, after use. Nicola Melick went to Mrs Tosolini about the note and a discussion ensued going beyond the note to a point where Nicola Melick deposed that it became apparent to the two of them that the Applicant had been saying poisonous things about each of Melick and Tosolini against the other. Nicola Melick then resigned her employment as she could not work with the Applicant. A few days after ceasing her employment, Nicola Melick then advised Mrs Tosolini about the customer and supplier lists allegedly printed off by the Applicant and provided her with the lists that allegedly had been given to Nicola Melick by the Applicant - and also advised of the inducement by the Applicant to enter into a business in competition with Zucci. The capital for this partnership was to be supplied by Nicola Melick's mother. Nicola Melick was also reported to be against this partnership idea (as was her mother). (The Applicant denied the above Nicola Melick scenario.) 15 Mrs Tosolini said she was shocked by this news and was due to travel overseas shortly on a fashion buying trip. However, before doing so, she claims she decided to test the Applicant as to the truth of what Nicola Melick had said. In that regard, she approached the Applicant and offered her the first option to purchase the Zucci business as Mrs Tosolini was sick and unsure about continuing with the business. Mrs Tosolini deposed that the Applicant's face seemed to light up like a globe and was grateful to be offered the opportunity to buy the business. The Applicant also said she did not have the money to consider the proposal but suggested a 50/50 partnership - the Applicant would do all the work for 7 days per week and Mrs Tosolini would only provide all the funds. (The Applicant disputes the above conversation version.) 16 In any event, Mrs Tosolini said the above conversation confirmed that Nicola Melick was telling the truth. Mrs Tosolini went overseas on her fashion-buying trip. She had Nicola Melick as a travelling companion on that trip. On her return, Mrs Tosolini did not immediately set foot in her store. She telephoned Fay Giannoulis (the other casual shop assistant) who allegedly said that life had been hell as the Applicant had reportedly been telling Ms Giannoulis to find another job because Mrs Tosolini was going to sell the business to Nicola Melick. (The Applicant denied saying this.) 17 Mrs Tosolini came into the shop around 5.30 pm on Wednesday, 22 October 2003. She confronted the Applicant and after putting her allegations to the Applicant, she handed over the summary dismissal letter of the same date. (The Applicant denied there was an opportunity to respond to the allegations and denies the allegations.) The letter said in part: " We have come into possession of credible evidence confirming that you have made customer and supplier lists - with an intention to challenge the Company in competition. We further understand that you have on a number of occasions, whilst employed with the Company, and at times during working hours, approached another member of staff with an intention to induce that person into an association with you as a competitor. " The above quote shows that there were two findings against the Applicant. Firstly - There was a finding by the Respondent she had printed off customer and supplier lists, being the property of the Respondent. The purpose in doing so, was to enter into competition with the Respondent. Secondly - There was a finding by the Respondent that the Applicant had approached another member of the staff (Nicola Melick) with an intention to induce Nicola Melick to enter into a business arrangement with the Applicant, in competition with the Respondent. The Applicant was summarily dismissed because of the above findings. 18 From the above circumstances, several issues arise: · The onus is on the Respondent (given the summary dismissal for serious misconduct); · Has the Respondent satisfied its onus that the Applicant had participated in the serious misconduct; · Was the dismissal harsh, unreasonable or unjust given all of the circumstances. ONUS IS ON THE RESPONDENT 19 The onus is on the Respondent to prove the serious misconduct alleged: Pastrycooks Employees, Biscuit Makers Employees & Flour and Sugar Goods Workers Union (NSW) v Gartrell White No 3 (1990) 35 IR 70 at 83-84. HAS THE RESPONDENT SATISFIED ITS ONUS? 20 Has the Respondent satisfied its onus that the Applicant had participated in the serious misconduct that led to her summary dismissal? In considering that question, the Commission has had regard to several issues. Thus: · The witnesses - the Commission has listed all witnesses and advised of those witnesses who have a familial or ex-familial relationship with other witnesses. · The credit of certain witnesses - especially of Nicola Melick whose serious allegations against the Applicant led to the summary dismissal of the Applicant. · The customer and supplier lists. It was Nicola Melick who made the allegation that the Applicant had printed off one or both lists on three separate occasions. She said the Applicant had provided her with a copy of the three lists. She alleged she saw the Applicant print off one of the three lists. · The inducement - It was Nicola Melick who made the allegation that the Applicant attempted to induce her to enter into a business arrangement in competition with the Respondent. This inducement required Nicola Melick's mother (Victoria Melick) to finance the alleged business arrangement. The Witnesses - For the Respondent 21 Mrs Chantal Tosolini is a director of the Respondent's business known as Zucci, which is a boutique shop located in Double Bay. Mrs Tosolini is married to a solicitor who is a partner in the law firm, Willis & Bowring. The instructing law firm in the proceedings for Mrs Tosolini was Willis & Bowring which was represented by Mr Mark Hay, solicitor, of that same firm. (For the Hearing, the Respondent was represented by Mr Magee, barrister.) Ms Nicola Melick is a long serving casual employee but with broken periods of casual engagement with the Respondent. The catalyst for the Applicant's summary dismissal arose out of discussions held by Ms Nicola Melick with Mrs Tosolini. Mrs Victoria Melick is the mother of Nicola Melick. She is a businesswoman who is the proprietor and partner in a fashion store in Adelaide. Brett Collins is the ex-husband of Ms Nicola Melick. Despite the divorced status, there is still an on-off relationship between he and his former and he and the former mother-in-law (Mrs Victoria Melick). As to his former wife (Nicola Melick), he visits her at work, (Zucci); drives her home sometimes; visits her at her apartment and goes out with her socially. He currently has a debt to Nicola Melick of $149,000. (Tr 18 May - pp 9 & 16) As to his former mother-in-law (Mrs Victoria Melick), he has written a letter to her, admitting to a loan from the former mother-in-law. (Tr 17 May - pp 49 & 50) Fay Giannoulis is a casual employee. The Witnesses - For the Applicant 22 Mrs Wanda Wadolowska (the Applicant) was the only full time employee and had been employed for nearly six years. As Mrs Tosolini did not work full time, then the Applicant held a position of trust. Mr Palermo is a businessman operating a leather garments store in Melbourne. He has known the Applicant for 14 years through his supply of leather garments to at least two shops in which she has worked - one of which is Zucci. He described himself and the Applicant as friends. Mr Mario Conti is the husband of the Applicant. During the proceedings, Mr Jaloussis called an additional witness: Mr Nassim Jelwan, the principle of an information technology business. His evidence went to the alleged ease of use of the Respondent's in store computer. The Credit of Witnesses Chantal Tosolini - her credit 23 Mrs Tosolini is a director of the boutique shop in Double Bay, known as Zucci. Mrs Tosolini acted upon the allegations made by Nicola Melick against the Applicant. She said she carried out an investigation into the allegations (assessing documentary material and conversing with certain persons) and then confronted the Applicant with a list of twenty matters for discussion. Having satisfied herself that the allegations were true, Mrs Tosolini handed over a typed summary dismissal letter. Mr Jaloussis thoroughly cross-examined Mrs Tosolini on her evidence. He did not accuse her of lying about any part of her evidence, as he had submitted about the marital/divorce evidence of Nicola Melick. He described, however, parts of her evidence as being " ridiculous ", " evasive " and " cannot be relied upon ." Mr Jaloussis gave these descriptions in light of certain matters not set out in her witness statement but subsequently put in the witness box or evidence that she gave on the second day in the witness box but which second day was six weeks after her first day of evidence. As to the certain matters not referred to in her witness statement, he asked the Commission to observe that these omissions from her witness statement occurred in the circumstance where she had prepared her statement with the assistance of her solicitor. Further, that solicitor was from a law firm where her husband is a partner in that firm. Mr Jaloussis submitted that under that circumstance, more care would be taken in the preparation of her statement. But despite that circumstance, he said there were certain omissions from her statement. The omissions, he submitted, went to significant matters in issue. Thus, he said that there was no reference in her witness statement to: · her accessing the computer and checking the staff sales analysis data in order to ascertain which employees were at work on three particular days: · her having several discussions with Mrs Victoria Melick (mother of Nicola) about the allegations made by her daughter in person and by telephone; · her discussion with Mr Brett Collins (ex husband of Nicola Melick), about the allegations made by his ex-wife; · her telephone discussion with John Palermo; The foregoing four points are matters relied upon by Mrs Tosolini to say she had carried out an investigation into the allegations against the Applicant before confronting the Applicant - but which matters did not appear in her witness statement. Mr Jaloussis submitted that the omission of these significant matters was because Mrs Tosolini had not investigated the above issues prior to the decision to discuss the Applicant. He went as far as to say that Mrs Tosolini was making up her evidence on the run about the above issues, whilst under cross-examination from him. The Commission found it unsatisfactory that such significant matters were omitted from her witness statement given Mrs Tosolini's legal representation but is not able to make a finding that Mrs Tosolini made up her evidence on the run. Mr Jaloussis' submission, however, does carry weight about the thoroughness of the investigation carried by Mrs Tosolini into the allegations made by Nicola Melick. Nicola Melick - her credit 24 It was an allegation made by Nicola Melick to Mrs Tosolini, about the Applicant, that was the catalyst for the summary dismissal of the Applicant. Nicola Melick, a few days after her resignation from the employ of the Respondent, had a conversation with Mrs Tosolini and made the allegation that the Applicant had attempted to induce Nicola Melick to go into business with the Applicant and that the Applicant had printed off customer and supplier lists (as to the Respondent's business), with a view to utilising that customer/supplier data in the potential business set-up between Nicola Melick and the Applicant. Nicola Melick handed over a copy of these customer and supplier lists to Mrs Tosolini. Nicola Melick told Mrs Tosolini she had been provided with a copy of these lists by the Applicant. There was no witness to the printing off of these computer generated customer/supplier lists - except for Nicola Melick, who said she witnessed on one occasion, the printing off of one of the lists by the Applicant. Putting that aside, there was no third party who witnessed and could support the allegation of Nicola Melick. Fundamental then, to the Commission's consideration of Nicola Melick's serious allegation (and the consequent events that unfolded leading up to the summary dismissal of the Applicant), was an assessment of Nicola Melick's credibility as a witness. Nicola Melick brought her credibility into question through her responses, under cross-examination, as to her marriage/divorce and her claim that she could not have taught the Applicant how to use the shop's computer as Nicola Melick was absent from work - getting married. Thus: " JALOUSSIS: Q. Brett Collins is your ex husband, is that the case, are you divorced? A. Yes Q When were you divorced from Brett Collins? A I don't remember the year. Q Do you recall the date you married him? A The date? Q Yes? A Not really. Q Do you recall the year? A No I don't. Q Do you recall how long you were married to him? A No, because I just told you I don't remember the exact years. Q No. I am asking you do you recall how long you were married to him. Three years, one year? A I don't recall." (Tr 17 May - p 73) As the above responses were given by Nicola Melick, the Commission listened in disbelief. The demeanour of this witness was such, as she gave these responses, as to make these responses not credible But more importantly, the Commission formed the view from her demeanour, that Nicola Melick knew (but was not concerned by her appearance in the witness box) that her responses would not be credible. 25 Mr Jaloussis made a submission to explain why, as he put it, Nicola Melick had lied about her marital/divorce dates. The reason concerned the Applicant's claim that when she began her employment with the Respondent (1 December 1997), she was trained by Nicola Melick in the use of the shop computer, from A to Z. (Tr. 13 April- p 28) (The Applicant was later recalled to give further evidence that Nicola Melick was absent for the first couple of week's of the Applicant's engagement and not present from day one of the Applicant's engagement, as she had previously stated. In any event, the Applicant's claim about Nicola Melick training her in the use of the shop computer remained as given). Nicola Melick denied she had trained the Applicant on the basis that Nicola Melick had ceased working for the Respondent (Tr. 17 May - p 65). This response combined with the Applicant's evidence that she began employment with the Respondent on 1 December 1997, means that Nicola Melick was getting married around November - December 1997. 26 Mr Jalousses had cross - examined Nicola Melick on her marriage/divorce details and had been given the response she could not recall when she got married. Her ex-husband (Brett Collins) advised he had been married three times with the final marriage to Nicola Melick. He recalled that they had married in June 1997. This June 1997 response contradicted Nicola Melick's claim that she would not have trained the Applicant in December 1997, as she was away getting married. 27 The Commission accepts Mr Jaloussis' submission that Nicola Melick had not told the truth as to when she said she got married and that the reason for not telling the truth was to remove her from the position of being in place to train the Applicant in the use of the shop computer- and that she had some competency with Zucci's sofware system. From the Commission point of view, the demeanour of Nicola Melick in the witness box as she gave her "can not recall" responses to the marriage/divorce questions, cast a credibility cloud over her evidence generally. When the Commission realised what issue in dispute was being sought to be covered up by her "can not recall" responses, then that merely confirmed the Commission's earlier adverse observation about the reliability of the evidence of Nicola Melick. Further, where there is a dispute between the evidence of the Applicant and Nicola Melick, then the Commission prefers the evidence of the Applicant. This finding by the Commission has far reaching application. The Applicant was summarily dismissed following the allegations made by Nicola Melick. The allegations went to the Applicant printing off customer and supplier lists and being observed doing so on one occasion. The Applicant denied this allegation. Nicola Melick's allegations went to conversations she had with the Applicant wherein Nicola Melick puts forward these conversations as support for her printing off of the customer/supplier lists allegation and that the Applicant was seeking to induce Nicola Melick to enter into a business in competition with the Respondent. The Applicant also denied these allegations. As already stated, the Commission prefers the evidence of the Applicant to that of Nicola Melick where their evidence conflicted. Wanda Wadolowska - her credit 28 Mr Jaloussis had said of Nicola Melick's evidence as to her marriage/divorce, "Why would Ms Melick lie about that?" (Tr 18 May - p 56). The Commission made an adverse finding about the credit of Nicola Melick based on her evidence about her marriage/divorce and her claim that she had not trained the Applicant in the use of the shop computer. By contrast, Mr Magee made no such submission about the credit of the Applicant arising out of the evidence given by the Applicant - although he did submit that there were inconsistences in parts of her evidence (just as Mr Jaloussis had remarked about parts of the evidence of the Respondent's witnesses). The Customer and Supplier Lists 29 The Respondent claims that the Applicant printed off customer or supplier lists (being of a sensitive commercial nature to the Respondent) on three occasions. This claim is based on information provided to Mrs Tosolini by the casual employee, Nicola Melick, who said she had possession of these lists as they had been given to her by the Applicant. She also said she had seen the Applicant do a print off on one of the three occasions. The Applicant denied she had printed off these lists (exhibits 9A, 9B and 9C). Mr Jaloussis submitted that these lists had been printed off by Nicola Melick who had altered the store computer so as to backdate the print off dates of these three lists. Mr Jaloussis put on an additional witness, during proceedings, being Mr Nassim Jelwan, whose company provided information technology services to business. Mr Jelwan's evidence went to the ease of altering the store computer to backdate documents. As can be seen from the foregoing there were competing versions to explain the creation of the three lists. The Commission will consider the Respondent's version given that the Respondent carries the onus to prove, on a balance of probabilities, that the Applicant had printed off these lists. The three lists bear different dates of printing: (a) 22 October 2001 (exhibit 9A) (b) 6 November 2001 (exhibit 9B) (c) 5 October 2002 (exhibit 9C) The Applicant denied she printed off these lists. 30 Mr Magee took the Commission to evidence in respect of each list to support the Respondent's claim that the lists had been printed off by the Applicant. That is he sought to show through certain business records that the Applicant was present at work on the three above dates and therefore she had the opportunity to print off the said lists. In any event, the Applicant conceded she was at work on each day in question. Mr Magee submitted these certain business records assisted in inferring that Nicola Melick was not at work on the days in question and hence did not have the opportunity to print off these lists. Mr Jaloussis used business records to argue that Nicola Melick could be inferred to be at work on the days in question. He also put forward the scenario that one or more lists were not printed off on the date shown on the printed off lists. (a) 22 October 2001 (exhibit 9A) - 31 This day is a Monday. The Sales Analysis document (exhibit 11) showed that a sale had been made by the Applicant on that day. The Applicant was therefore at work and Mr Magee said she had the opportunity to print off the customer or supplier list dated that day. The Applicant agreed she was at work this day. Exhibit 11 did not show any sales by any other employee and therefore Mr Magee said this suggested that Nicola Melick was not at work that day, although he conceded, it was not conclusive. 32 Mr Jaloussis challenged the inference put by Mr Magee that Nicola Melick was not at work. He pointed out that the best source for determining the attendance or otherwise of employees at work was the Respondent's wages book. However, the Respondent had had a wages book but it fell into disuse, said Mrs Tosolini. (Tr 14 May - p 18) No wages book(s) were produced by the Respondent, in response to a summons for production by Mr Jaloussis. Mr Jaloussis also challenged the claim that Nicola Melick was not at work on 22 October 2001 (a Monday) on another ground. Mrs Tosolini had given evidence that Nicola Melick did work in the shop on Mondays but only every second Monday. She sought to say that there was documentary evidence that stated that Nicola Melick was at work on Monday, 29 October and therefore Nicola Melick did not work on the prior Monday, 22 October, being the date the customer list was printed off the shop's computer. (Tr 14 May - p 30) However, under further cross-examination, Mrs Tosolini conceded that she would " have to check " whether Nicola Melick's working pattern of every second Monday was for the year 2001 or 2002 and then conceded she was "guessing" as to whether the every second Monday working pattern was for 2001 or 2002 (Tr 14 May - pp 33 and 34) 33 Putting aside the problems with the Respondent's evidence (lack of a wages book and the every second Monday claim), Mr Magee's submission that Nicola Melick was likely not at work on 22 October, was thwarted by Nicola Melick's evidence that she saw the Applicant printing off the customer list. (exhibit 30 - paragraph 32 and Tr 17 May - p 90) This admission however, places Nicola Melick at work on the day in question, so that she also had the opportunity to print off the customer list herself that day. This admission also raises another issue and that goes to the very claim of Nicola Melick that she was at work that day, in order to then be able to say she observed the Applicant printing off the customer list. The Commission refers to the witness statement of Mrs Tosolini (exhibit 9, paragraph 32) wherein she deposed the following: " Nicola mentioned to me that Wanda had taken client and supplier lists when Nicola had not been employed by Zucci " (emphasis added) Now it seems that there is a contradiction between what Nicola Melick said she observed and was given on 22 October 2001 (when in the employ of Zucci) and the deposition of Mrs Tosolini that Nicola Melick told her that she was not in the employ of Zucci when the Applicant had taken the client and supplier lists. (There was no dispute between the advocates who both accepted that Nicola Melick was in the employ of Zucci on 22 October 2001). This evidence of Mrs Tosolini places an additional cloud over the evidence of Nicola Melick as to what she claims to have observed and been given by the Applicant. The Commission has already made an adverse finding about the credit of Nicola Melick. If Nicola Melick was not at work then her allegation against the Applicant as to what she observed and was given by the Applicant is a fiction. This raises the question as to Nicola Melick's other allegations against the Applicant being a fiction. This raises the question as to Nicola Melick's other allegations against the Applicant being a fiction. If, however, the Commission's reading of the extract from Mrs Tosolini's witness statement is in error, then Nicola Melick was at work on 22 October 2001, by her own admission and therefore had the opportunity to print off the customer list for that day. That possibility does not assist the Respondent's case that it must be true that the Applicant printed off the lists as she was the only employee at work on the three days in question. The Respondent's case is not helped by Nicola Melick admitting to being at work on that day. (b) 6 November 2001 (exhibit 9B) - 34 This day was a Tuesday (Melbourne Cup Day). The Applicant agreed she was at work that day. Mrs Tosolini gave evidence she did not work on Melbourne Cup Day and hence she did not print off the list for this day. Mr Magee submitted that Nicola Melick had not printed off the list as she had left the employ of the Respondent in late October 2001. He also relied on documentary evidence in support. This evidence was the Respondent's financial year diary dated 2001 - 2002 which had the following handwritten notation for 29 October: " Nicolas's last day at work ". Both Nicola Melick and Mrs Tosolini gave oral evidence in support of Nicola Melick leaving the employ of Zucci in late October. If that was so then how could she have printed off the supplier list for 6 November? Mr Magee said the foregoing suggested that the list for that day had been printed off by the Applicant, as no other person appeared to be at work that day. 35 Mr Jaloussis challenged the certainty with which it could be said that Nicola Melick had left the employ of the Respondent in late October 2001. His submission about the absence of the best evidence (the wages book) to determine the issue has already been recorded for the 22 October 2001 issue. Mr Jaloussis had Mrs Tosolini agree that she was making an assumption that the diary entry in question signified that that was the last day Nicola Melick was at work. He suggested that the diary entry may have meant it was the last day at work for Nicola Melick before she went on leave, as in annual leave. It was also the case that Mrs Tosolini was asserting in October 2003, when she carried out an investigation into the allegations made by Nicola Melick, that she (Mrs Tosolini) knew that Nicola Melick was not at work on 6 November 2001 as Ms Melick had finished up late October 2001 - this incident being two years earlier. Mr Jaloussis, however, took Mrs Tosolini to the computerised sales dockets which showed two business transactions carried out by Nicola Melick on 14 and 15 November 2001. These transactions place Nicola Melick still in the employ of the Respondent subsequent to the print off date of the second list (6 November 2001). In re-examination, Mrs Tosolini said that even though the business transactions in question had Nicola Melick's initials shown, that did not necessarily mean that she was at work on 14 and 15 November. Mrs Tosolini explained that someone else may have carried out the business transaction but because the original sale was by Nicola Melick, then any subsequent business transaction (eg lay-by payments, alterations) carried out by another employee, would not show the initials of that another employee, but the initials of the original sales person. This explanation did not rule out, however, the possibility that the 14 and 15 November transactions were carried out by Nicola Melick and hence would place her still in the employ of Zucci and subsequent to the print off date (6 November 2001) of the second list. The Respondent, of course, carries the burden of proof to show that Nicola Melick was not in the employ of Zucci as at 6 November 2001 and the Commission cannot find, given the above evidence as to the second list, that the Respondent has made out its case on this question. 36 Mr Jaloussis also challenged the evidence surrounding the print off for the supplier list for this date (6 November 2001) on another ground altogether and in consequence challenged the entire claim of Nicola Melick that she had been provided with customer and supplier lists by the Applicant - either for this date or all three dates the lists were printed. Mr Jaloussis referred to evidence (exhibit 24 - a handwritten end of day report) to suggest that the shop's computer was not working for the day in question (6 November 2001) and therefore no supplier list could have been printed off by the Applicant on that day, as alleged by Nicola Melick. Nicola Melick confirmed under cross-examination that handwritten end of day reports were done when the computer was not working. ( Tr 17 May - page 107) This evidence raises the question as to how a supplier list could have been printed off on this day (6 November 2001) and bear that date on the computer print out, if the computer was down? 37 Mr Jaloussis submitted that the lists had been created by Nicola Melick who had altered the store's computer in order to backdate her created lists. Why would Ms Nicola Melick do such a thing? Mr Jaloussis answered that this was a motivated by a "get square" campaign by Nicola Melick against the Applicant. Mr Jaloussis relied upon the foregoing to support his version of the events that having left the employ of Zucci, Nicola Melick in a few days then produced a story about the customer and supplier lists and going into business in competition against Zucci, in order to bring about the dismissal of the Applicant. As he put it, this was Nicola Melick's "get square with the Applicant". Now for this "get square" to have effect, it was necessary for Mr Jaloussis to show that Nicola Melick had the computer skills to print off the lists but as well, utilise the computer so as to manipulate the computer in order to produce a date for the "print offs" but being a print off date different to when the "print offs" were actually done. 38 As to the computer skills of Nicola Melick the Commissioner finds that Nicola Melick sought to down play her skills. 39 Firstly, there is the evidence of the Applicant that she was taught the use of the Zucci computer system by Nicola Melick, who denied this but the Commission prefers the evidence of the Applicant . As to what she was taught by Nicola Melick, the Applicant described as being from A to Z in computer use. 40 Secondly, Nicola Melick down played her computer skills by describing them as "basic" (Tr. 17 May - p75-77). But under cross-examination she agreed she carried out a number of business functions using the shop computer although she gave these the description as "basic". Nicola Melick had also been in the employ of the shop (present and past owners) for eleven years and it is difficult to accept that that length of service would just have equipped her with more than just "basic" computer skills. What of course was behind the cross-examination of Nicola Melick on her computer skills, was whether she had printed off customer or supplier lists. She denied she had even printed off a customer list in her eleven years on and off service. Mr Jaloussis had established through his cross-examination of Mrs Toslini that the process for printing off the customer or supplier lists was one of following the instructions on the screen - otherwise known as screen prompts. (Tr.14 April - pp 67-69). Nicola Melick's response to this screen prompt process, was to say that she was not good at following instructions. (Tr 17 May- p 75). A little later in her cross- examination she was asked if she knew how to change the date on any of the documents in the computer. She replied in the negative. (Mr Jaloussis had raised the scenario that the supplier list for 6 November had not been printed off on that day because there was evidence that the computer was down that day. He then submitted that for a supplier list to bear the date of 6 November, it had to be printed off on another date but backdated by manipulating the print off date in the computer). Mr Jaloussis pursued the negative response that she did not know how to change the date on any of the documents in the computer, and Nicola Melick then said she guessed she could do it if she had instructions. (Tr. 17 May -p77). Her earlier response however was that she was not good at following instructions. She further advised that there were instructions on how to change the date on the computer and it was found in the 1999/2000 shop diary. 41 As already state, the Commission finds that Nicola Melick down played her computer skills. She also contradicted herself about her ability to follow instructions. The evidence of Mrs Tosolini was that the Zucci computer program system was based on following the screen prompts which of course is a system of following instructions The Applicant's evidence, which the Commission prefers, is that she was taught the A to Z of how to use the computer by Nicola Melick. The Commission finds that Nicola Melick had the computer skills to print off a customer or supplier list. 42 It is not necessary for the Commission to make a finding as to whether Nicola Melick printed off the customer or supplier lists as evidence in the support of the scenario being put forward by Mr Jaloussis. The Commission does not need to do so in light of its eventual finding that the Respondent has not satisfied its onus that the Applicant had printed off the lists on three separate dates. But the Commission did wish to make another assessment about the reliability of the evidence given by Nicola Melick. (c) 5 October 2002 (exhibit 9C) - 43 This day was a Saturday. The Applicant conceded she would have been at work that day. Mr Magee said that Nicola Melick had restarted employment with the Respondent but made no further submission as to her whereabouts on that day. The advocates did not have the benefit of transcript, but the Commission did. On reading the evidence of Mrs Tosolini in cross-examination, she stated that her investigation into the allegations of Nicola Melick, showed that Nicola Melick was at work on 5 October 2002. (Tr 17 May - p 5) Summary 44 The Commission has been considering the Respondent's claim, based on Nicola Melick's allegations, that the Applicant had printed off customer or supplier lists on certain dates. The Respondent had argued in support of the "print-off" allegation, that the Applicant was present at work on the certain days in question but other employee(s) were not. Accordingly, the Applicant had the opportunity and being the only employee at work on those certain days, then Nicola Melick's allegation must be true. The evidence, however, did not support this allegation. As to the first date, 22 October 2001, the Applicant was not alone. Nicola Melick by her own admission was there and hence also had the opportunity to print off the customer list for that day. Putting that aside, Nicola Melick claimed she saw the Applicant printing off the customer list but this was denied by the Applicant. The Commission has already determined that in any dispute between the Applicant and Nicola Melick, that the Commission prefers the evidence of the Applicant. Accordingly, the Respondent has not made out its case against the Applicant for this day. As to the second date, 6 November 2001, the Respondent argued that Nicola Melick could not have been at work on that day as Nicola Melick had left the employ of Zucci by late October. The Commission, however, formed the view that there was evidence showing that Nicola Melick may still have been at work beyond 6 November 2001, as her initials appeared in the computerised sales dockets for certain business transactions. If that was the case, Nicola Melick may have been at work on 6 November. The fact that the sales book does not show a sale by Nicola Melick for that day, does not mean she was not at work that day - because sales are not made every day by every employee. As for the third date (5 October 2002), Mrs Tosolini confirmed that Nicola Melick was present at work. This meant that Nicola Melick also had the opportunity to print off the customer list for that day. The Commission has found that the Respondent has not made out it's case, on the balance of probabilities, against the Respondent. The Inducement 45 The Respondent's second ground for summary dismissed was that the Applicant had approached another member of the staff (Nicola Melick) with an intention to induce Nicola Melick to enter into a business arrangement with the Applicant, in competition with the Respondent. The foregroup allegation was made by Nicola Melick, who claimed that that inducement had taken place at two dinners. There was also reliance by the Respondent on evidence deposed by Brett Collins. The Two Dinners 46 There were two dinners held, involving some of the witnesses. The significance of the dinners is that both the Applicant and Respondent assert that the other side initiated a discussion about going into a business partnership with the other. The Respondent, through the submission of Mr Magee, sought to put a favourable light on the two dinner conversations as being conversations supporting its case against the Applicant. 47 The First Dinner - The attendees were the Applicant and her friend, John Palermo, who is a manufacturer of leather clothing in Melbourne. He appeared as a witness for the Applicant. On the other side were Nicola Melick and her mother, Victoria Melick. The date of this dinner appears to be early in 2001. The Applicant said that the suggestion of her and Nicola Melick going into business together came from Nicola Melick and her mother. (The Applicant, in her evidence, did not distinguish as to which of the daughter or mother first raised the partnership idea). Mr Palermo's evidence was that Victoria Melick (the mother) raised the issue of her daughter and the Applicant going into business together. Victoria Melick denied under cross-examination that she suggested that her daughter and the Applicant go into business together. Nicola Melick denied under cross-examination that she had suggested to the Applicant that the two of them would be better off setting up a business of their own. When Mr Magee put his submission to the Commission about the foregoing evidence, he said that the evidence " is difficult for anybody to resolve ". (Tr 31 May - p 15) But despite that submission, Mr Magee sought to draw a certain suggestion, a certain implication and certain consistencies from the first dinner conversation, in support of the Respondent's case. On one view, the Commission could conclude that Mr Magee was correct in saying that the matter "is difficult for anybody to resolve", and leave it at that. More pointedly, because the matter is difficult to resolve, the Respondent has failed to prove, on the balance of probabilities, that the Applicant sought to induce the two Melick's into a business arrangement in competition with the Applicant. But on another view, in a dispute between the Applicant's evidence and that of Nicola Melick, the Commission prefers the Applicant's and hence that leaves a dinner scenario with the Applicant and John Paleruio on one side of the table as to what was said, and only one (Mrs Melick) on the other side giving her dinner conversation scenario. In any event, the Commission finds that the Respondent has not made out it's onus in respect of the first dinner conversation. 48 The Second Dinner - The attendees were the Applicant and her recent husband, Mario Conti. On the other side were Victoria Melick and her daughter, Nicola Melick. The date of the dinner is apparently somewhere between March and July 2003. The Applicant deposed that an invitation was extended to her to work in a new shop in partnership with Nicola Melick. She said she was not interested in the proposals for certain reasons. (exhibit 1 - para 18) Mario Conti (her husband) deposed that Nicola Melick or her mother suggested that the Applicant should go into business with Nicola in competition with the Respondent. (exhibit 8 - paras 3 to 9) Victoria Melick deposed she had not made such an invitation. (exhibit 29 - para 25) Nicola Melick deposed that the Applicant asked questions, of her mother, of a business nature and made a comment that the Applicant and Nicola would be fantastic together in business. (exhibit 30 - paras 30 and 31) The Applicant denied the claims of Nicola Melick. Mario Couti (the Applicant's husband) said under cross examination that Nicola Melick and her mother described Mrs Tosolini as an incompetent person. Mario Conti said it was possible that his wife asked questions about Victoria Melick's business but said so in the context of not recalling any business questions being asked by his wife. In any event, he said he had no recall of the questions being asked by his wife, being the questions which were being attributed to her by Nicola Melick. When pressed again, he said his wife had not asked any questions as opposed to it was possible she did which latter response had initially been given often he had said he had no recall. This change from positions of "don't recall" to "it's possible" to "no she did not" may have been due to his level of understanding of the English language. An example of the latter comment that reflects the Commission's recollection of Mr Couti's handling of English is as follows: Q. At any stage during that meeting, did Wanda make a comment that she was not interested in going into business, either in partnership or on her own? A. May I ask you, you say that - you're asking me if Wanda was - would you rephrase that again? (Tr. 13 April - p87) Having considered the competing evidence for who said what at this second dinner party, the Commission concludes with the same views as expressed for the first dinner party. Again, the Respondent has failed to satisfy it's onus. Brett Collins 49 Brett Collins is the ex-husband of Nicola Melick. He deposed that he was present when the Applicant had discussions with his ex-wife about the respondent's business. He said the Applicant urged Nicola Melick to go into business with her in competition with the respondent. Further, the Applicant had said she had a full list of customers and suppliers. When cross-examined about this, he said that these conversations about the lists " were taking place last year also" (last year in 2003). (Tr 18 May - p 16) The significance of this answer as to the year 2003, was that it did not make sense as Mr Jaloussis submitted. On the Respondent's version, the Applicant had printed off two lists in late 2001 and one list in October 2002. It made no sense, based on Brett Collins evidence, that the Applicant " made mention of the fact" (exhibit 35) that she had these lists in 2003, when it is an "old fact". On the Respondent's case, the Applicant had in her possession two of the lists from the year beforehand. As this "new fact" does not live up with the established "old fact" as put by the Respondent, the Commission is not able to place any weight on the evidence of Brett Collins. CONCLUSION 50 Having considered all of the evidence, the Commission concludes that the dismissal of the Applicant was harsh, unjust and unreasonable: Outboard World Pty Ltd (t/as Budget Waste Control Sydney) v Muir (1993) 51 IR 167. The Applicant has sought compensation of 26 weeks pay as her remedy. There was evidence that the Applicant had obtained other employment subsequent to her summary dismissal. Mr Magee submitted for the Respondent that if the Commission was to award any compensation, then it should be towards the lower end of the spectrum. In assessing a claim for monetary compensation, the Commission must consider the provisions of s 89(6) - that is, whether an Applicant made a reasonable attempt to find alternative employment and the remuneration gained by an Applicant who succeeded in obtaining alternative employment. However, s 89(6) is not to be taken as a simple, mathematical formula in the assessment of compensation and the Commission retains its discretion to order the appropriate quantum of compensation, as the Commission deems appropriate for the circumstances under consideration: D and R Commercial Pty Limited v Flood (2002) 113 IR 344 The Commission also notes that reinstatement was not sought and the Commission has formed the view that reinstatement is impracticable. In considering the quantum of compensation that is appropriate, the Commission has had regard to a number of matters: · the Applicant was summarily dismissed but the Commission has found without substantive basis; · the Applicant was a full time employee of approximately six years standing; · the Applicant held a position of trust demonstrated by the director (Mrs Tosolini) being absent overseas on fashion buying trips and leaving the Applicant in charge of the Respondent's business. O R D E R S In this matter, for reasons outlined herein, I have determined that the dismissal was harsh, unjust and unreasonable and I hereby make the following orders: (a) The Commission orders that the Respondent pay to the Applicant an amount of compensation of 26 weeks pay, where a week's pay is $770 gross. (b) The amount of compensation specified above has been determined, having regard to section 89(5) and 89(6) of the Act. (c) The amount of compensation specified above is to be paid by the Respondent to the Applicant within twenty-one days from the date of this Decision. A Macdonald 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.