Industrial Relations Commission of New South Wales CITATION: Ingersoll v JRS Pty Limited [2005] NSWIRComm 1195 APPLICANT Ms. M. Ingersoll PARTIES: RESPONDENT: JRS Pty Limited t/as Prime Appointments International FILE NUMBER(S): 3468 of 2005 CORAM: Ritchie C Application for threatened dismissal. Parties met to discuss issue. Applicant maintained her position Correspondence from applicant's solicitor maintain position. Applicant terminated. Applicant in arbitration admitted lying to respondent concerning her whereabouts on a particular morning. Reason for lying due to a particular situation. Mobile phone records indicated her whereabouts. CATCHWORDS: Applicant aware of the phone records prior to arbitration. Applicant believe termination due to avoidance of payment of bonus. Found by Commission that applicant lied to respondent and maintained lie for over five weeks notwithstanding contrary evidence. Had ample opportunity to tell the truth. Found termination due to lying to respondent and maintaining lie and not to do with payment of discretionary bonus. Application dismissed. LEGISLATION CITED: Industrial Relations Act 1996 CASES CITED: Mason v Electricity Commission of NSW [1995]NSWIRC78 HEARING DATES: 10/19/2005; 11/04/2005 DATE OF JUDGMENT: 11/24/2005 Mr. M.Perry of Counsel LEGAL REPRESENTATIVES: Solicitors: Employment Lawyers Mr N. Chadwick from Fisher Cartwright Berriman DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: Ritchie C. 24 November 2005 Matter No IRC 3468 of 2005 IN THE MATTER OF: Mandy Ingersoll and JRS Pty Limited t/as Prime Appointments International Application by Mandy Ingersoll re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION [2005]NSWIRComm 1195 Background. 1 On 4 July 2005 Ms. Mandy Ingersoll (the applicant) filed an application for threatened dismissal by JRS Pty Limited t/a Prime Appointments International (the respondent). She had been working for the respondent since 1 April 2003. Conciliation was held on 5 and 12 July 2005 when the application was stood over pending the applicant contacting the Commission by 22 July 2005 as to what she wanted done with her claim. On 21 July 2005 the applicant with her solicitor met with Mr. Starr of the respondent to discuss the situation. The applicant was terminated by the respondent on 21 July 2005. A further conciliation was held on 5 August 2005 when at the conclusion, the applicant's legal representative was to contact the Commission as to his client's wishes within seven days. The Commission was advised that the applicant wished the matter to proceed to hearing and a timetable for the filing and serving of evidentiary material was provided to the parties. The hearing was held on 19 October and 4 November 2005. Applicant's Case. 2 From his opening submission Mr. Perry of Counsel stated that the real issues arose between the parties at or about the time that the applicant raised the payment of a discretionary bonus as an issue with the respondent's manager. At or around the same time the respondent placed a vacancy advertisement for the applicant's position. 3 On the morning of 30 June 2005 the applicant was rung on her mobile by her manager Mr. Starr to ascertain her whereabouts. That afternoon she was directed to take annual leave. When she returned to work she worked from the respondent's Head Office at North Sydney instead of her normal location at Parramatta where she was the Manager. 4 It was the applicant's submission that in June 2004 she had a face to face meeting with Mr. Joe Screnci who is the owner and Chairman of the respondent. At that meeting the applicant stated that a verbal agreement was reached where she would receive a 10% bonus if she achieved budget. She considered that she would be paid a bonus equivalent to 10% of all revenue achieved by her in excess of the sales target for the year ending 30 June 2005. No discussion was made that the bonus was discretionary. 5 A lunch was held in February 2005 with Mr. Screnci and Mr. Starr where the applicant was congratulated on her work performance and questioned about her future with the respondent. On the same day two senior employees of the respondent resigned and the applicant was asked to look after the hospitality division for a while. 6 By late May 2005 the applicant was the only permanent employee based at Parramatta. Also at the same time the applicant was being medically investigated for possible cancer which required surgery on 19 May. She advised Mr. Starr by fax on 25 May that a further medical appointment was required plus her concerns about staffing and IT problems. 7 It was the applicant's view that by late June 2005 she was well ahead of the sales target for year ending 30 June 2005. Emails between her and Mr. Starr and Mr. Screnci followed concerning the budget, IT issues and staffing. 8 It is noted that Mr. Screnci stated that the payment of the bonus was discretionary and that it was not based solely on sales. 9 On 29 June 2005, a vacancy notice was listed on the internet which in her view was her position. She was not aware of the listing at the time. 10 On 30 June 2005 the applicant was woken at her Paddington home at 8.00am by a phone call from Kristine who worked for Roadshow. She also received a phone call from Tanya Ford who was at the Parramatta office to advise that she had a toothache and that she was going to the dentist. The applicant left home and proceeded to Roadshow located at Punchbowl. She arrived at Roadshow and completed her business. The applicant was not feeling well and had started to get her period. She decided to return home to change her clothing. On the way home she called another client Mr. Alan Poole of SIKA Australia Pty Limited and advised him she was running late. After changing her clothes the applicant then drove to Wetherill Park to see Mr. Poole. 11 In examination in chief the applicant stated that she arrived at Punchbowl at between 9.00am and 9.30 am. and arrived at Wetherill Park between 11.00am and 11.30am. 12 In cross examination the applicant admitted that she had received a phone call on her mobile from Mr. Starr during the morning of 30 June 2005. She admitted that she lied to Mr. Starr concerning her whereabouts. She told Mr. Starr that at 8.00am she was at Roadshow when in reality she was at home. She also told Mr. Starr that she had been to CDM Communications when she had not been there at all that morning. 13 The applicant was shown a copy of her mobile phone records that covered the period of 30 June 2005( Ex.1 annexure10). The applicant accepted that she had seen this document prior to 21 July when she had had the meeting with her legal representative and Mr. Starr. She admitted that she phoned Mr. Poole at 10.42 am on that morning. She was in the Kings Cross area. Further mobile phone records of Mr. Starr showed that he had called the applicant at 10.37am on that morning. The call lasted 4.00 minutes. 14 The applicant stated that she lied to her manager Mr. Starr about her whereabouts because she was embarrassed about having to go home and get changed and she was not going to give any personal information to that man. 15 Attached to the applicant's statement (Ex. A annex. M) was correspondence from her lawyers to Mr. Starr dated 19 July 2005. The four page letter instructed by the applicant, laid out a response to correspondence received from the respondents dated 7 July 2005. Under a sub heading the following was expressed : Response to letter of 12 July 2005 "As you are aware, our client has already furnished an explanation at the conciliation of this matter in relation to these allegations. Our client attended upon Roadshow Entertainment at approximately 8.00am on 30 June 2005 and later attended upon Sika for an occupational health and safety site inspection at approximately 8.45 am. At that time, Mr. Poole was not available, and our client commenced the inspection with the team leaders, and later met up with Mr. Poole for the completion of the inspections." The applicant did not believe she had instructed her lawyers with a version that was untrue, only the timing. 16 The applicant believed the reason she was sent on leave by Mr. Starr was not to do with her whereabouts on that morning but that he did not wish to pay her bonus. 17 At the meeting on 21 July 2005 it was the applicant's evidence that she did not tell either Mr. Starr or her legal representative Mr. Barwick what had really occurred on the morning of 30 June as she did not get the opportunity. She also denied that Mr. Starr had made any comment about the use of her company mobile phone number on the letterhead of her partner's company. 18 She admitted that she had had a number of opportunities between 30 June and 21 July to tell the true version including the conciliation held before the Industrial Relations Commission of New South Wales. Her defence was that she was embarrassed as it was always an all male environment. 19 The applicant admitted that she had received a written warning from Mr. Starr ( dated 15 April 2005) concerning a comment she had made to a fellow employee: "You'll regret having ever having joined this company." The applicant accepted that it was an inappropriate comment to make and that a written warning was deserved. 20 The applicant denied that in June 2005 she made a comment to another employee Tania Ford that Mr. Screnci and Mr. Starr were trying to deprive her of her bonus. It was the applicant's view that the payment of the bonus was not discretionary although she accepts that her contract of employment expressed that the bonus was discretionary. 21 Ex C was provided by the applicant to show that the applicant had received a copy of mobile phone records covering 30 June 2005 on 20 July 2005, the day before her meeting with the respondent. In one of the emails from the applicant to Mr. Adrian Barwick (dated 20 July 2005) she stated in part: "I have reviewed the phone records and make the following observations. As you know this business starts early and I had already been to Roadshow, I then went to SIKA for the site inspection which I carried out with the team leaders, Alan Poole signed off on the safety audit later that morning. This is the document we presented at the first tribunal. En route back Alan Poole and I were playing telephone tag as the phone records indicate. I then swapped cars with Jacqui as she needed the RAV and commenced my journey to the office. 22 The applicant did not tell Mr. Barwick the truth about her actual whereabouts on the morning of 30 June in the email as again she was embarrassed to say she had had to go home and change her clothing. 23 In responding to questions from the Commission the applicant stated that she told her lawyers the truth when she was preparing her statement for these proceedings. She accepted that once the phone records were shown to her, what she had told Mr. Starr would be shown to be false. She also accepted that she had previously told the respondent that she had a substantive medical problem and required time off. 24 Mr. Alan Poole gave evidence to state that he is the site supervisor for SIKA Australia. He had organised with the applicant for an on site inspection on the morning of 30 June 2005. He stated that the applicant was on site mid morning on that day. Mr. Poole defined mid morning to go from 10.00am to 1.00pm. He works 15 hours a day so mid morning is a long stretch. He stated that he had received a phone call from Mr. Starr on the morning of 30 June inquiring about the applicant. He advised Mr. Starr that she was not on site as she was running late. 25 The applicant sought by way of compensation an Order from the Commission for the payment of six months wages. Respondent's Case. 26 Mr. Michael Starr gave evidence on behalf of the respondent. Mr Starr is the Managing Director of the respondent. As the Branch Manager, the applicant reported to him from 6 September 2004 onwards. 27 On 3 February 2005 the applicant, Mr. Starr and Mr. Screnci met at North Sydney. The applicant was late for the meeting as she had attended North Sydney Local Court about a private matter. Mr Starr spoke to the applicant about taking time off to attend to a private matter without first seeking approval from him. He confirmed that he had given the applicant a written warning with respect to what she had said to a fellow employee one Danielle Bonham. He confirmed that they spoke to the applicant about her career path but denied making comment about her bonus looking good or that she could have her pick of running the Brisbane or Melbourne office. They did mention that they wished to open a new office at Liverpool and the need to employ another manager to assist with this project. 28 He stated that the internet advertisement for a Branch Manager arose out of discussions he had had with Mr. Screnci and the applicant. He had placed the same advertisement on several occasions. He knew nothing about "the teaser" that allegedly went with the advertisement. He denied that the advertisement was placed because the respondent had determined to terminate the applicant. 29 Ms. Tania Ford gave evidence to advise that she was employed by the respondent at its Parramatta office since 30 May 2005. She reported to the applicant up until 30 June 2005.It was her evidence that the applicant had raised the issue of the payment of the bonus prior to the end of the financial year. On the morning of 30 June 2005 she arrived at her office at approximately 7.45am. She then rang the applicant at approximately 8.10am and confirmed that she was going to the dentist. The applicant confirmed that she had been asleep. She also stated that she was going to divert the phones to the applicant's phone. She returned to the office at about 9.30 am. Not long after she received a phone call from Mr. Starr inquiring about the whereabouts of the applicant. He was advised that the applicant was not in the office but that she had spoken to the applicant at home at about 8.00am that morning. 30 On 7 April 2005 Mr. Starr had a meeting with the applicant which was followed up with an email on 19 April 2005 outlining operational and management issues. One of the operational requirements was that if she was absent due to illness or other reason she must notify Mr. Starr prior to 9.00am. Mr. Starr also believed that the Parramatta office was not being manned at 8.30 am each day so he sent the applicant an email requesting the applicant to ensure that it was manned at that time. 31 On 30 June 2005 Mr. Starr rang the applicant on her mobile to ask where she was.From his mobile phone records the call was made at 10.37 am. He had previously rang the Parramatta office but got a recorded message. He was told by the applicant that she was at SIKA with Alan Poole. She stated that she had been to Roadshow at 8.00am, then went to CDM Communications at Revesby then Webhaul at Smithfield and then to SIKA. At about 11.10am he rang Alan Poole who advised that while he was expecting to see her, he at that point had neither heard or seen her. He then rang the applicant who again stated that she was with Mr. Poole. Mr. Starr replied that he had just spoken to Alan and he had neither heard or seen the applicant. He then requested that she take annual leave for the balance of the day and then see him and Mr. Screnci on Tuesday next 5 July at 11.00am. 32 On 4 July Mr. Starr received correspondence from Employment Lawyers stating that they were now acting for the applicant and that they had filed an urgent threatened dismissal application. Correspondence then was exchanged between the respondent and Employers Lawyers after the parties had appeared before the Commission on 5 July 2005. 33 Post the parties coming before the Commission on 12 July, a further exchange of documents by the respondent to the applicant's legal representative and their response took place. 34 Upon receipt of the applicant's responses it was Mr. Starr's view that the applicant had lied to him on 30 June as to her whereabouts that morning and continued to lie. 35 A meeting took place on 21 July 2005. It was Mr. Starr's view that the return correspondence did not answer concerns he had raised in his correspondence. During the meeting Mr. Starr left the room and spoke to Mr. Screnci. When he returned he terminated the applicant for misconduct. He stated that he advised the applicant at the time the reason for her termination. 36 In cross examination Mr. Starr did not agree with the financial history (ExA annex B). The document showed monetary amounts for each month which Mr. Starr said were not "net profit" but "gross profit". From that figure a number of standing costs had to be deducted to arrive at the net profit. He also stated that at no time since joining the respondent had he any discussions with the applicant concerning the payment of bonuses. One of his return emails to the applicant stated that he did not have anything to do with her bonus. 37 Mr Starr also stated that he placed an add on an internet web site on the afternoon of 29 June 2005 (ExA annex. I), he had never seen the teaser (Ex.A annex.J). He stated that the add was not for the applicant's job but for new branches. 38 Mr. Joe Screnci also gave evidence. He stated that he did not say that she would be entitled to a 10% bonus. Her contract stated that the payment of the bonus was discretionary and the timing of the payment if made was silent. The applicant received a bonus for the year ending 2003/4 in August 2004. The Parramatta office achieved its monthly sales target for the first half of 2004/5 financial year but had not achieved net profit when compared to budget. From January 2005 up to her termination, the financial results of the Parramatta deteriorated substantially. He rejected the financial "net profit" figures as expressed in the applicant's affidavit, as such figures did not take into consideration a number of costs. It was a gross profit figure. The attached spreadsheet had been designed by the applicant. 39 He also denied that at the meeting with the applicant in February 2005 he made the comment as alleged by the applicant concerning her bonus. 40 He also confirmed that the vacancy advertisement placed on 29 June 2005 had been placed previously. It was placed in an endeavour to find managers that could set up new branches in the Sydney metropolitan area for industrial recruitment. 41 He had wanted to speak with the applicant with respect to her comments made to Ms. Ford about not trusting Joe with respect to the bonus. This did not take place as the applicant's threatened dismissal claim came on before the Commission on 5 July 2005. He was also concerned that the applicant had placed the respondent's mobile phone on her partner's company letter head. 42 He was also aware that the applicant had a health issue with respect to a middle ear problem. He also became aware afterwards that there was an issue of suspected cancer. Consideration and Decision. 43 It was the applicant's case that the applicant had had a good relationship with the respondent up to early 2005. Post that date the respondent stated that they had some concerns about the applicant's performance but it was vague in nature. Any issues that the respondent did have were responded in detail in correspondence from the applicant's lawyers in July 2005. Therefore the only issue that the respondent could rely on was what occurred on 30 June 2005. 44 The lie told by the applicant was not substantive in nature but only a "white lie". She eventually did get to the premises of the client that day. The applicant worked a fifty hour week and also took out of work phone calls from clients. The actions of the respondent to terminate the applicant for what occurred that day was harsh. The applicant was under siege and as a consequence reacted in the way that she did. Annexures "I" and "J" to Ex. A showed that the respondent was going to terminate the applicant. The response by both Mr. Starr and Mr. Screnci as to their knowledge of annexure "J" should not be believed. 45 It was the respondent's submission that the applicant had lied to Mr. Starr as to her whereabouts on the morning of 30 June 2005. The applicant then maintained that lie to at least after 5 August 2005. The applicant held a senior position with the respondent. It was incumbent upon the applicant to speak the truth when asked a simple question by her immediate boss. The applicant could not be trusted. Neither Mr. Starr nor Mr. Screnci had ever seen Annexure "J" and both denied that Annexure "I" was an advertisement for the applicant's job. She had showed open hostility towards both Mr. Starr and Mr. Screnci concerning the payment of her bonus. The respondent had satisfied the test of the burden of proof resting with it, by the admissions of the applicant. Persons employed in managerial positions carry with their position a higher onus when it came to the discharge of their duties. 46 It is the Commission's finding that it is clear from the evidence that had been placed before it and had been conceded by the applicant that she lied to Mr. Starr concerning her whereabouts on the morning of 30 June 2005. The applicant clearly misled Mr. Starr when he asked her where she was when he rang her at 10.37am. 47 The reason given by the applicant as to why she did lie to Mr. Starr was that she had on that morning commenced her period and had to return home to change her clothing and she was not going to tell him that. 48 This lie as to her correct whereabouts on that morning then continued up until the time when she commenced to draft her affidavit for the arbitral proceedings in this application. It continued during her initial briefing with her lawyers, who maintained her instructions through written correspondence with the respondents and through two conciliations before this Commission. This Commission gave ample opportunity for the applicant to state the true situation, be it during off records discussion during conciliation proceedings or when the Commission suggested that the parties meet and exchange documentation in an endeavour to settle the matter. 49 During examination the Commission asked the following question to the applicant: Q. Yet, it would be fair to say, wouldn't it, that once the phone records were shown to you, what you had said to Mr. Starr was going to get blown out of the water, wasn't it ? A. Yes. 50 The applicant was in possession of the phone records prior to the meeting of 21 July 2005. She said that she did not have the opportunity to raise the issue of her true whereabouts during the meeting as discussions were on other issues. She advised the Commission that the meeting went for about twenty minutes. I do not accept this submission that she did not have an opportunity. The applicant is a mature woman who did not strike me as being so reticent in character that she would fail to raise and discuss this obvious outstanding issue. It is my finding that the applicant had ample opportunity to give the true version of events of where she was on the morning of 30 June 2005 at that meeting. 51 The applicant had also stated that she was embarrassed to express the real reason as she was in an all male environment, be it with her legal representative, at the meeting on 21 July 2005 between the parties and at the two conciliations in the Commission. Embarrassment is an individual matter. Something that may embarrass one person may not to the same extent embarrass another. That the employee was embarrassed on the morning of 30 June in her view led her to lie to her manager as to her whereabouts that particular morning. The applicant by her own admissions had previously advised the respondent of health issues she had and had not been critical of the respondent in how it was handled. 52 Whilst one may understand and perhaps with some reluctance accept that, being "caught on the hop", her immediate response (due to her stated reason) was to tell a lie, I do not in anyway accept that this lie should have continued for the length of time that it did. I believe it was incumbent on the applicant that at the first opportunity post 30 June to advise Mr. Starr of the facts. As the respondent had organised to speak with the applicant on the following Tuesday 5 July this would have been the appropriate time. This the applicant did not do but instead directed her lawyers to file an application on the following Monday morning 4 July for a threatened dismissal. It would seem from that action that the applicant clearly decided not to tell anyone the truth. This decision not to tell anyone the truth but to maintain this lie for at least the next five weeks (post 5 August 2005) damaged any opportunity to resolve the matter, be it internally with the respondent or externally through the Commission. By filing her threatened dismissal application, the applicant sought this Commission's assistance to resolve her claim. How was the Commission supposed to assist in this matter when it was not being told the truth ? I note the comments made by Hill J. of this Commission who in a full bench decision of Mason,MW V Electricity Commission of NSW (Hill J.) NSWIRComm78 (16 May 1995) stated: "There is no doubt on the evidence that Mr. Mason lied, and in fact did so quite intentionally, to the officers of the respondent who were endeavouring to ascertain the facts relating to the relevant issues then confronting the respondent. I agree with the finding of Harrison CC that Mr. Mason was not "trapped into an untruth ", that he had "ample opportunity to consider and sober advice to assist him," and further that there was "no room for misunderstanding or interpretation of events differently, Mr. Mason was confronted with a specific and accurate description of his activities which he denied." 53 In this case the applicant due to her own actions, withheld the truth until preparing for the arbitration. It would have to have been self evident to the applicant that this lie could not last as the mobile phone records would be self evident as to what really occurred. 54 The applicant held an executive position with the respondent. Such a position held responsibilities that required the applicant to act in a trustworthy manner. I accept that by her actions she had broken the trust that must exist between employee and employer. 55 I do not accept the submission of the applicant that her termination was carried out to avoid the payment of a bonus. It is clear from the terms of her Employment Contract signed by the applicant on 1 April 2003 that the bonus was discretionary and was subject to achieving specific performance criteria. Emails from Mr. Screnci to the applicant clearly reinforce the criteria that would be used to determine whether a bonus was paid. 56 It is my finding that the termination of the applicant by the respondent was neither harsh, unjust or unreasonable. 57 I therefore dismiss this application. This matter is now concluded. D.RITCHIE 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.