Industrial Relations Commission of New South Wales CITATION: Mathews v Keene Consulting International Pty Ltd [2006] NSWIRComm 1134 APPLICANT: PARTIES: Mr Stephen Mathews RESPONDENT: Keene Consulting International Pty Ltd FILE NUMBER(S): 1515 of 2006 CORAM: Ritchie C Claim for unfair dismissal,terminated for unethical behaviour. Application 14 days out of time. Applicant delayed in filing due to consideration of various jurisdictions to take action against the respondent. Commission accepted out of time claim. Applicant submitted that he was terminated to avoid being paid commissions. CATCHWORDS: Respondent submitted that applicant terminated as a consequence of receiving a phone call from a client. Client had advised that after giving work to the applicant ,applicant advised that he was ceasing with the respondent and was starting up his own business. Disagreement in evidence between applicant and client. Commission believed the evidence of the client . Found that the applicant had acted in an unethical manner, which warranted instant dismissal. Application dismissed. LEGISLATION CITED: Industrial Relations Act ,1996 CASES CITED: Brady v Kennedy t/as "Sardines"(1999) 91IR258 HEARING DATES: 18/08/06 DATE OF JUDGMENT: 09/06/2006 APPLICANT: Mr S. Borrow -Solicitor LEGAL REPRESENTATIVES: Leana Street Consulting Pty Ltd RESPONDENT: Ms C. Keene DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: Ritchie C. 6 September 2006 Matter No IRC 1515 of 2006 IN THE MATTER OF: Stephen Mathews and Keene Consulting International Pty Ltd Application by Stephen Mathews re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION [2006] NSWIRComm 1134 Background 1 On 18 April 2005 Mr. Stephen Mathews (the applicant) commenced employment with Keene Consulting International Pty Ltd (the respondent) as a telemarketer. During his employment with the respondent he took up a position as a recruitment consultant. On 8 February 2006 the applicant was terminated without notice by Mr. Peter Keene for unethical behaviour. He was then escorted from the premises. 2 On 15 March 2006 the applicant's legal representative filed a claim for unfair dismissal. Conciliation was held on 6 April 2006 but was unsuccessful. On that day directions for the filing and serving of evidentiary material was provided to the parties. 3 A hearing date of 10 August 2006 was provided but had to be cancelled due to an injury sustained on the day by Ms. C. Keene (medical evidence supplied). The hearing then took place on 18 August 2006. At the completion of proceedings the Commission reserved its decision. 4 At the hearing Mr. S. Borrow, solicitor appeared for the applicant and Ms. C. Keene appeared for the respondent. Applicant's Case. 5 The applicant gave evidence for his case. 6 It was the applicant's submission that during his employment with the respondent he experienced problems in getting paid commissions that he believed he was entitled to. He had raised this issue of non- payment with the respondent but had not been satisfied with their response. As a consequence he saw this non- payment as an outstanding issue with the respondent. 7 Mr. Borrows submitted that the reason for his client's termination was the avoidance by the respondent of the payment of his outstanding commissions. 8 The applicant had noticed that a client of the respondent, KH Foods Limited announced that they were going to appoint a new CEO. In 2005, the applicant had in his role as a consultant been successful in finding that company a new Chief Financial Officer. He therefore contacted a Mr Peter Robinson Chairman of that company on 6 February 2006 and offered his assistance in finding a new CEO. The following day he spoke with Mr Robinson and organised a meeting with him for 8 February 2006. At the same time he advised Mr Robinson that he would be bringing a former colleague, Mr Peter Tossman to the meeting. Mr Tossman had formerly worked as a pastry chef and had a deep knowledge about production line kitchens. 9 The applicant with Mr Tossman met Mr Robinson the following morning at the offices of Mr Robinson. The meeting went for approximately one and one half hours. At the completion of the meeting as the applicant was leaving the offices of Mr Robinson, he told Mr Robinson words to the effect: "We will need to talk about my continuing relationship with Keene. They have until Friday to settle my commissions. I will call you Monday." 10 The applicant rejected the version of that brief discussion as expressed in Mr. Robinson's written version. He denied that he told Mr Robinson that he was leaving the respondent on the Friday of that week, that he and his colleague were setting up an office in the city and he would send him a draft of the advertisement by the end of that week. 11 The applicant then returned to the respondent's offices. That afternoon he was called into the offices of Mr. Peter Keene. The applicant stated that Mr Keene asked, whether he had a problem with Keene, which he replied the non-payment of his commission, and was then accused by Mr Keene of conducting a business. The applicant responded that they had had this conversation before and sought for Mr Keene to name the company. Mr Keene accused him of being previously terminated for unethical behaviour, to which the applicant replied by naming another company, which had been discussed at his interview. The applicant stated that Mr Keene then dismissed him for unethical behaviour and directed him to leave the building. The applicant replied that he was not leaving until he had been paid his commission. Security was called and the applicant was escorted off the premises. As he was leaving he told Mr. Keene that the reason he was doing this was to get out of paying his commission. The meeting between the applicant and Mr Keene took approximately one minute. The applicant stated that no time did Mr. Keene constitute what the unethical behaviour was. The applicant was terminated for gross misconduct. 12 The applicant said that around 6.30pm that night he phoned Mr Robinson on his mobile phone and advised him that he had been terminated by the respondent. He stated that he could still do the job from a serviced office facility and could provide a draft of the job advertisement. It would be in a new enterprise of his own. The applicant did not believe he was restricted by any aspect of his contract of employment with the respondent that would prevent him from offering his services to Mr Robinson. It was the applicant's view that his contract of employment had been torn up by the respondent when in January 2006 his contract had been unilaterally varied by the respondent so he would be paid purely on a commission basis only. 13 On Tuesday 17 February 2006 the applicant lodged a claim of $10,687.08 before the Chief Industrial Magistrate for the recovery of unpaid commission, unpaid wages, superannuation and annual leave. 14 On 24 February 2006 the applicant received a sum of $1834.86 deposited by EFT into his account. 15 At the time of the hearing the applicant was unaware of the outcome of his claim before the Chief Industrial Magistrate. 16 The applicant stated that he was fortunate to obtain new employment on 14 February with Prime Appointments where he continues in employment. He stated that he was on a package similar to the one he was on at Keene Consulting. The applicant believed he was worse off financially now because he had had various commissions in the pipeline when he was terminated, but had difficulty in quantifying the difference. 17 Mr Borrows stated that whilst the applicant had sought compensation of six months pay he was realistic and sought no less than $5000. The applicant was paid about $1100 to $1200 per week. 18 The applicant was terminated on 8 February 2006 and filed his application for unfair dismissal on 15 March 2006. The application was therefore 14 days out of time. In the applicant's "Application for relief in relation to unfair dismissal" Question 34 he stated: " This application is 13 days late. The delay is substantially attributed to uncertainty about the avenues available to the applicant." 19 The applicant stated that he spoke to several law firms within a week of his termination including Leane Street Consulting Pty Ltd. He gave instruction for Mr Borrow to file an unfair dismissal claim around late February early March 2006. A few days later he followed up that instruction and was advised by Mr. Borrow that he was on the case and he was going to file. The applicant stated that he was considering various proceedings including the Supreme Court, to wind up the company, the Commercial Court, the Commercial Disputes Tribunal and the Local Court. An issue was also raised by Mr Borrow that the applicant had concerns over the ongoing viability of the respondent and an investigation by the Australian Taxation Office. The applicant had therefore a concern that any action he took may have been a waste of time and money. The applicant was therefore considering all jurisdictions covering the non- payment of monies and unfair dismissal. Respondent's Case. 20 The respondent provided their evidentiary material through two witnesses, Mr Peter Robinson and Ms Christine Keene. Ms Keene had sought to have a witness statement of her husband Mr Peter Keene admitted but this was objected to by Mr Borrow, on the basis that the statement had not been filed and served in accordance with normal practise. Ms Keene said she had sent the statement in a bundle of documents directly to the applicant. I upheld the objection of Mr Borrow. 21 Mr Robinson stated that he had met with the applicant in early February 2006 to discuss the finding of a replacement for the Chief Executive Officer. He had had dealings with the applicant in the previous year when another vacant position was successfully filled by the applicant. 22 At that meeting the applicant brought another person with him. The applicant advised that his colleague had a background in the food industry which would help him in his search for this replacement. At all times Mr Robinson believed that both the applicant and his colleague, whose name he did not remember, were employees of the respondent. 23 When the meeting finished and the applicant was standing in the foyer of Mr Robinson's office he told Mr Robinson that he would be leaving the respondent at the end of the week and that he would be establishing an office in the city and that he would be establishing it with his colleague. The applicant also said that he would like to continue to offer his services to Mr Robinson's group of companies and felt he had the attributes to be able to provide that service. 24 Mr Robinson stated that after further reflection he felt uncomfortable with continuing working with the applicant in the search when he was leaving the respondent. He therefore rang Mr Peter Keene. He advised that he did not feel comfortable with continuing to use the applicant when he was leaving at the end of the week. Mr Keene stated that he had no knowledge of the applicant leaving at the end of the week. Mr Robinson said that he felt as though he had been misled by the applicant and confirmed with Mr Keene that the respondent was to continue to search process. Later in the week the applicant sent via email a draft vacancy notice and also phoned Mr Robinson concerning the draft vacancy notice. The applicant was then told by Mr Robinson that KH Foods was committed to using the respondent. 25 In a question from the Commission, Mr Robinson stated that he did not receive a phone call from the applicant on the night of 8 February 2006 26 In cross-examination, Mr Robinson stated that at no time did the applicant on 8 February raise the issue of concerns he had with the respondent about the non-payment of commissions. He was asked the following question: Q. You don't remember the word entitlements or commission or anything of that description being raised ? A. The only time that it was mentioned to me was when Mr. Mathews and I were just sitting outside this room. 27 In answering questions from the Commission, Mr Robinson stated that what he was looking for in the vacant position, was a person who potentially had fast moving consumer goods background. The person did not have to have an industrial cooking background. 28 He also was quite clear that the time and place when the applicant told him that he was leaving the respondent and that he and a colleague were going to set up an office in the city was in the foyer of his office after their meeting, on the morning of 8 February and not as expressed by the applicant that night at approximately 6.30pm over his mobile phone. 29 Ms Keene gave evidence that she is a Director of the respondent. She stated that the applicant had commenced in a telemarketing role and then progressed to a consultants' position. The different positions had different rates of pay and a different commission basis. Whilst there had been concerns about the applicant carrying out foreign work whilst working for the respondent, he had been spoken to by Mr Keene and had promised he would not repeat this. She also stated that the respondent had difficulty in getting the applicant to sign a letter of change of commission from his old role to the new one. He just would not sign it. 30 She had stated from the bar table that that she had received a copy of the Chief Industrial Magistrate's Decision with respect to the applicant's claims and could not understand why the applicant had not received his copy. The decision was dated 8 August 2006 and the applicant had been unsuccessful in his claim for payment of commissions. A copy was provided to Mr. Borrows who had not been briefed in that matter as the applicant had run the case himself. 31 Ms Keene stated that she had not been in the office on 8 February 2006 when she received a phone call from her husband. He recounted the phone conversation he had had with Mr Robinson and said they had a serious problem and sought input from her as to how they should handle it. She said that she advised her husband that they were obliged to hear both sides so he had to sit down with the applicant and get his version of events. When she got back to the office she saw the applicant being escorted out of the offices, therefore she played no part in the meeting between the applicant and Mr Keene that resulted in the applicant being terminated. 32 She confirmed that the reason for the termination of the applicant was as a consequence of what had occurred between him and Mr Robinson on the morning of 8 February 2006 and they being alerted by the subsequent phone call by Mr Robinson to Mr Keene. It had nothing to do with any alleged non- payment of outstanding commissions. Considerations and Decision. 33 The first issue that must be determined in this matter, is that of the application being filed out of time. As previously expressed the application was filed some 14 days late. The respondent by their "Employers Reply to Application for unfair dismissal" objected to the extension of time. 34 It was only as a consequence of questions directed to the applicant by the Commission that any information to support the applicant's claim for the application to be accepted was received. Even then the information concerning dates of meetings with legal advisers, directions given and general views was somewhat vague. 35 Whilst there exists within the Act the requirement for applicant's to file their unfair dismissal claim within 21 days after dismissal, sect. 85(3) of the Act provides the power for the Commission to accept an application out of time. That section of the Act is expressed in the following terms: The Commission may accept an application that is made out of time if the Commission considers there is a sufficient reason to do so, having regard in particular to : (a) the reason for, and the length of, the delay in making the application, and (b) any hardship that may be caused to the applicant or the employer if the application is or is not rejected, and (c ) the conduct of the employer relating to the dismissal. 36 Having considered the reasons for the delay in filing as expressed by the applicant, the limited length of the delay, the lack of hardship experienced by either party and that the applicant had an arguable case, I will use my discretion and allow the acceptance of this application. I note also the comments of Walton V. P. in Brady v Kennedy t/as "Sardines" that: "the ultimate exercise of discretion is governed by the requirements of justice in a particular case." 37 The reason given by the respondent for the termination of the applicant was for unethical behaviour. He was summarily dismissed without the payment of notice. It therefore falls on the respondent in this case, to prove beyond the balance of probability that the reason for termination as claimed by the respondent, did take place. The respondent argued that they acted on what was relayed by Mr Robinson to Mr Keene in a telephone call on the afternoon of 8 February 2006. 38 Mr Robinson rang Mr Keene as a consequence of what he said the applicant stated in the foyer of his office after their meeting on the morning of 8 February 2006. It was Mr Robinson's evidence that the applicant told him that he was leaving the respondent's employment that Friday and that he was going to set up his own office in the city with a colleague and that he wished to continue doing business with him. 39 It was the applicant's evidence that all he said to Mr Robinson was, that he would have to talk to him about his continuing relationship with the respondent as they had until that Friday to settle his commissions and that he would call him back on Monday. 40 Mr Robinson was quite clear in his evidence, that on that Wednesday morning, there was no mention by the applicant about "commissions" or that the applicant was in disagreement with the respondent. He made comment that the first he had heard about "commissions" was from the applicant when he was waiting outside the court, on the day of the hearing, prior to giving his evidence. He stated that after the conversation he immediately went to another meeting but later in the afternoon reconsidered his position as he felt there was something not quite right. He said that the applicant was working for Keene, he had given the applicant a job to do in regards to the search and that the applicant was leaving at the end of the week. He felt as though he had been misled. 41 The applicant stated that he was not told by Mr Keene, at their meeting on the afternoon of 8 February 2006, of the phone call by Mr Robinson and what he was alleged to have stated in Mr Robinson's foyer. He stated it was a very short meeting and that he was being terminated for unethical behaviour. As Mr Keene did not give evidence then the Commission has only that evidence before it. 42 It is my view and finding that the crux of this matter falls on the evidence of the applicant and Mr Robinson concerning the conversation in Mr Robinson's office foyer and what followed. I do not accept that the applicant was terminated as a consequence of the respondent seeking to avoid the payment of commissions. 43 Mr Robinson in his statement said that he rang Mr Keene that afternoon and relayed the post-meeting conversation he had with the applicant. He was not questioned on that phone call, be its content or even if it did take place. It is my finding that this afternoon phone call from Mr Robinson to Mr Keene did take place. The question then has to be asked as to why did Mr Robinson make such a phone call ? If the Commission was to believe the evidence of the applicant, then it would have to conclude that Mr Robinson lied to the Commission and Mr Keene acted on that lie, or that they both concocted their evidence. For what reason would have Mr Robinson to lie and fabricate this story. There was no evidence that there was any "bad blood" between the applicant and Mr Robinson. On the contrary the applicant had previously been successfully in finding a Chief Financial Officer for Mr Robinson and here was an opportunity for more business. In my view that would hardly be a basis for Mr Robinson to now perjure himself in this case. The only relationship between the respondent and KH Foods Limited was that KH Foods was a client of the respondent. 44 It is my finding that Mr Robinson phoned Mr Keene on the afternoon of 8 February 2006 for the reasons he expressed in evidence. I can find no reason to conclude otherwise. 45 It is also my finding that the conversation between the applicant and Mr Robinson did take place as expressed by Mr Robinson. I can understand and accept why Mr Robinson on reflection, concluded that something felt not quite right and why he made the phone call. 46 The applicant was asked the following question by the Commission: Q. Okay. Would you agree that if a person such as yourself had gone to a client, said they were leaving and sought to retain business at the same time for the new business entity, that would be unethical behaviour ? A. Yes, it would be. 47 As a consequence of my findings with respect to the evidence I should now consider the actions of the respondent in terminating the applicant without notice. At all times prior to and during the meeting with Mr Robinson, the applicant presented himself as a representative of the respondent. It was only after the meeting had concluded and he had been requested to carry out a search for the vacant CEO position that he advised Mr Robinson of his future employment plans. The applicant had utilised his position as an employee of the respondent to gain access to Mr Robinson and was then going to seek to capture this new work for his own private benefit. The applicant did clearly not have his employer's best interest at heart when he spoke to Mr Robinson after their meeting. It is my finding that the actions of the applicant should have resulted in instant dismissal 48 It is therefore my conclusion that the termination of Mr Stephen Mathews by Keene Consulting International Pty Ltd was neither harsh, unjust or unreasonable. 49 This application is dismissed and the matter is 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.