Candido and L & M Scott Haulage Pty Limited [2001] NSWIRComm 16 (7 February 2001)

Last Updated: 20 March 2001

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Candido and L & M Scott Haulage Pty Limited [2001] NSWIRComm 16

FILE NUMBER(S): 1242

HEARING DATE(S): 24/10/2000, 25/10/2000, 05/12/2000

DECISION DATE: 07/02/2001

PARTIES:

APPLICANT

Eddy James Candido

RESPONDENT

L & M Scott Haulage Pty Limited

JUDGMENT OF: Grayson DP

LEGAL REPRESENTATIVES

APPLICANT

Mr J P Berwick of Counsel

SOLICITOR

Mr K Gourlie

Critchon-Browne Crossley

RESPONDENT

Mr D A Allen of Counsel

SOLICITOR

Mr L J Hancock

Hancock Solicitors

CASES CITED: Bomanite Pty Ltd & Ors v Slatex Corp Australia Pty Ltd & Ors (1991) 104 ALR 165

The State of Queensland & Anor v JL Holdings Pty Ltd

(1997) 189 CLR 146

The Spanish Club v Bounouar (1999) 94 IR 173

Allison v Bega Valley Council (1995) 63 IR 68

Blyth Chemicals v Bushnell (1933) 49 CLR 66

Byrne v Australian Airlines Ltd (1995) 185 CLR 410

Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359

LEGISLATION CITED: Industrial Relations Act 1996

JUDGMENT:

- 1 -

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

CORAM: GRAYSON, DP

DATE:7 February 2001

Matter No. 1242 of 2000

EDDY JAMES CANDIDO and L & M SCOTT HAULAGE PTY LIMITED

Application by Eddy James Candido re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996

DECISION

1    By application filed with the Commission on 24 March 2000, Mr.Eddy James Candido (the applicant) seeks relief under Part 6 of Chapter 2 of the Industrial Relations Act 1996 (the Act) from alleged unfair dismissal by L&M Scott Haulage Pty. Ltd. (the respondent).

2    Conciliation was attempted without success on 16 May 2000 and 16 June 2000 and the matter went over for hearing on 24 October 2000 and 25 October 2000 and then ultimately to early December 2000 for the filing of submissions.

3    It might usefully be noted here that there emerged in the course of conciliation on the first day, an apparent intention on the part of the respondent to rely upon allegations of theft, dishonesty and other misconduct on the part of the applicant.

4    In the interests of enabling those matters to be more adequately ventilated and given that the applicant was hearing about them on 16 May 2000 as matters which would be raised against him without prior notice; the respondent was directed to furnish the applicant within 14 days - that is, not later than 30 May 2000, with written particulars of any such allegations upon which it sought to rely.

5    The direction further required that the particulars ought be sufficient to describe not only the incident or incidents in question but also the evidence that would be available to be adduced by the respondent if the matter proceeded to arbitration.

6    The matter went over to 16 June 2000 for report back and further conciliation on which date it was apparent that the respondent had complied with the direction in only the most perfunctory manner such as to effectively defeat the intended purpose of assisting in the conciliation process.

7    In the circumstances, it appeared as though further conciliation would be of little or no use and the matter was listed for hearing on the dates mentioned above.

8    A timetable was fixed for the filing and exchange of evidentiary material and the matter was listed for mention on 14 July 2000 to ensure it's readiness to proceed to hearing.

9    On 14 July 2000, the applicant appeared by his representatives as before and filed in court a statement of evidence consistently with the Commission's directions.

10    There was no appearance by the respondent, no statements of evidence and no explanation for either failure.

11    The deadline for filing and service of the respondent's evidence was extended to 28 July 2000 and a further direction was made as to compliance.

12    The Commission noted the helpful undertaking by the applicant's legal representatives to so inform the respondent and the matter went over for hearing on the appointed days.

13    On 24 October 2000, the applicant was represented as before by Mr.J.Berwick of counsel and the respondent was represented by Mr.D.Allen of counsel.

14    When asked to explain his client's failure, apparent from the court file, to comply with the Commission's direction as to the provision of evidentiary material, Mr.Allen experienced some difficulty in obtaining precise instructions but in the discussion that followed between the bench and the bar table it became clear that there had again been only the most perfunctory compliance with directions given and repeated.

15    The fact, as it transpired in the course of that discussion, was that the respondent had filed nothing let alone by the 28 July 2000. The respondent's solicitors had however, forwarded to the applicant's solicitors under covering letter 5 September 2000, an affidavit of Darren James Scott dated 14 August 2000.

16    By further letter of 19 October 2000, the respondent's solicitors forwarded to the applicant's solicitors, three statements one dated 3 May 2000, another dated 13 October 2000 and the other unsigned and undated.

17    By letter of 20 October 2000, the respondent's solicitor forwarded to the applicant's solicitors three documents described as draft affidavits together with an unrealised undertaking that sworn affidavits would be served shortly.

18    In such circumstances, Mr.Berwick for the applicant mounted a vigorous application that the respondent by its failure to comply with directions as to the filing and exchange of evidentiary material, should be denied the opportunity to adduce evidence from the seven witnesses it intended to call.

19    In support of his application, Mr.Berwick relied on the decision of the Full Court of the Federal Court of Australia in Bomanite Pty. Ltd. and Ors v Slatex Corp Australia Pty. Ltd. and Ors (1991) 104 ALR 165 (Pincus, Gummow and French JJ) where an interlocutory order of the primary judge (Lockhart, J) refusing leave to file affidavits out of time was held by majority (Pincus J dissenting) in the circumstances of that case to be an appropriate exercise of discretion.

20    Mr.Berwick drew particular attention to the observations of the dissenting judge as to the necessity to consider the balance of justice on both sides. The dissenting judge (Pincus J) at p169 said this:

"When the court is asked to make an order of this kind, one which may shut out crucial evidence, considerations other than such a balancing may, in some circumstances, be decisive. For example, it may be found that there is a history of persistent disregard of directions, of such seriousness as in itself to merit a severe order, having the purpose of upholding the court's authority"

21    Mr.Allen in opposing the application, relied on the decision of the High Court of Australia in The State of Queensland and Anor v J.L.Holdings Pty. Ltd. (1997) 189 CLR 146 in which it was held that whilst case management principles were a relevant consideration (in deciding in that case whether the primary judge correctly refused leave to amend a defence which, though arguable, was likely to result in the vacation of the date which had been fixed for the trial, six months ahead), they could not be used to prevent a party from litigating an issue which was fairly arguable provided any prejudice to other parties could be compensated by costs.

22    Mr.Berwick sought to distinguish J.L.Holdings by citing its lack of application to the regime of costs which are governed in this jurisdiction by s181 of the Act as distinct from the normal run of litigation where costs follow the event.

23    He submitted that the remarks made in Bomanite regarding the requirement that parties to litigation run their cases properly is not bad law as Mr.Allen argued, but rather they were entirely appropriate to the circumstances of this case.

24    Having heard the opposing arguments and having regard to the fact that the affidavit of Mr.D.Scott had been in the hands of the applicant's legal advisers for almost two months and therefore whilst undoubtedly late could not be said in general terms to be prejudicial, whereas the various statements (signed and unsigned) and draft affidavits of other respondent witnesses had been provided to the applicant only one or two business days beforehand, I formed the view that the just and equitable disposal of the matter would be well served by enabling the respondent to adduce evidence from it's main witness, Mr.D.Scott and no others.

25    In my opinion ss162 and 163 of the Act permit such a procedure to be determined and such a view to be formed within the broad discretionary powers they confer without it is hoped, doing violence to the authorities relied upon by the opposing counsel.

26    Furthermore, I am fortified in that opinion by the decision of a Full Bench of this Commission in The Spanish Club Ltd. v Bounouar (1999) 94 IR 173.

27    In that matter the Full Bench was considering whether to grant leave to appeal from the decision of my colleague Sams, DP who had determined to exclude certain evidence the appellant wished to adduce because the appellant had failed without proper reason to provide affidavits from their witnesses in advance of the hearing as directed.

28    In refusing leave to appeal, the Full Bench said this:

"It is imperative that parties to proceedings before this Commission comply with directions designed to facilitate the efficient and effective determination of matters before the Commission. Absent any proper explanation, any party in default of the direction will run the risk of a sanction imposed by the presiding member of the Commission.

In our opinion the sanction imposed by the Deputy President of excluding the relevant evidence was within his discretion. We cannot see any basis for granting leave to appeal on this ground in these proceedings. Notwithstanding the carefully and clearly argued submissions by Mr.Newell of Counsel who appeared for the appellant, leave to appeal is declined.

We have departed from the usual practice of the Commission not to provide reasons for declining to grant leave to emphasise the importance of the directions of the Commission being complied with unless there be good reason shown on the basis of material in proper form placed before the Commission to justify non-compliance.

Leave to appeal is declined."

29    In leaving that matter, it is to be noted that Mr.Allen did not, in the end result, seek to rely on report evidence he initially sought to adduce from the respondent's corporate accountant conceding helpfully that it may cause prejudice to the applicant.

30    Turning then to the matters given in evidence, the applicant Mr.Candido worked, until his employment with the respondent ended on 6 March 2000, as an allocator or transport allocator as the case may be.

31    His hours of work were nominally 3am to 3pm Monday to Friday inclusive and his annual remuneration was in the order of $35,000 gross plus motor vehicle, fuel and mobile phone allowances said to be in the order of $10,000 per annum, $2,500 per annum and $2,500 respectively.

32    To the extent that the Commission has rounded out and in other cases annualised those amounts from available evidence, it is fair to say I think, that unlike other issues in the case there was little or no controversy as to remuneration levels such that greater precision in that regard might otherwise be required.

33    The respondent operates a business hauling shipping containers to and from the various maritime ports of Sydney and the essential task of the transport allocator was to organise and manage the daily movement of shipping containers consistently with the instructions of customers of the business.

34    The manner of transporting the containers was by heavy vehicles owned and operated by the business.

35    The applicant, as transport allocator, held an important position within the respondent company and had done so for some twelve years or so prior to 6 March 2000.

36    An extract from Mr. Darren Scott's statement tendered and admitted into evidence in the respondent's case adequately describes the applicant's duties thus:

"a) The Allocator liases with the entire customer base;

b) To obtain details of containers that will need to be picked-up and

c) To keep the customers informed of when they can expect a container to be delivered.

d) The Allocator liases with the import agencies and wharf staff to obtain information on arrival dates for particular containers.

e) The Allocator allocates drivers to pick-up containers based on the above information and in order to fulfill prompt delivery of the containers top the customers.

f) The Allocator administers the customs bond store;

g) Ensuring all customers documents are processed and distributed to the freight forwarders in the most expedient fashion.

h) The Allocator also organises subcontract labour during particularly busy periods." (Exhibit 1)

37    As to the most immediate circumstances in which the applicant's employment came to an end on or about 6 March 2000 and I describe that event in neutral terms in deference to the vigorous contest between the parties as to whether there was in fact a dismissal, there would appear from the evidence to have been an unfortunate misunderstanding between the applicant and his boss, Darren Scott.

38    It is common ground that sometime in the week commencing 7 February 2000, the applicant asked Darren Scott for the following week off on holiday leave.

39    The leave was approved by Darren Scott notwithstanding the shortness of notice and personal inconvenience to him on the basis put by the applicant that he had some urgent family business to conduct.

40    It emerged in the applicant's cross- examination that the real reason he asked for the leave was to be able to carry out work on the residence owned by Darren Scott's sister, Kylie.

41    The applicant admitted to intentionally misleading Darren Scott in that regard because he was aware of the acrimonious personal relationship between Darren Scott and his sister and felt that his application for holiday leave may not have been dealt with objectively if the real basis for it had been disclosed to Darren Scott.

42    At all events, on Sunday 20 February 2000 - the day before he was due to return to work - the applicant again spoke to Darren Scott and made application to extend his holiday leave.

43    The applicant was adamant that he asked for a further week off and Darren Scott was equally adamant that the applicant only asked for a further day off, namely Monday 21 February 2000.

44    Again the applicant misled Darren Scott as to the real reason he sought to extend his holiday leave, that reason being as before, the work he was carrying out on the house owned by Darren Scott's sister.

45    It is unclear from the evidence when Darren Scott became aware of the applicant's holiday activities but he steadfastly maintained in cross-examination that those activities played no part in his mind in the events leading up to the termination of the employment relationship. Whether or not that is so remains a matter on which the evidence permits little more than speculation.

46    What transpired, however, in the course of the week commencing Monday 21 February 2000 was that the applicant's wages were initially withheld and then later inadvertently or intentionally but in any event inconsistently with his wishes, paid in full into his ex-wife's bank account, an account to which he had no access. For some time prior to that, it seems, a certain amount of the applicant's weekly wage would be paid into his ex-wife's account to meet his ongoing obligations to his children.

47    Further, the lease payments on his car which had previously been made to the finance company by direct debit from the employers account were stopped.

48    As to the withholding of the applicant's wages, Darren Scott indicated that this was done because of an inability to make contact with the applicant notwithstanding numerous phone calls and a visit to the applicant's residence on Monday 21 February 2000 (see Exhibit 1, par 34 and 35).

49    As to the stopping of direct debit car lease payments, Darren Scott's evidence was that it was merely a decision to revert to the arrangement which had previously existed whereby instead of the employer paying the car lease payment directly to the finance company, the applicant would be paid a car allowance in an amount equivalent to the lease payments and would then transact business with the finance company on his own account. (see transcript pp75-81, 25 October 2000).

50    If the employer's action in withholding the applicant's paycheck was intended to re-establish lost contact with him, then it achieved it's objective because the applicant rang Darren Scott later in the week commencing Monday 21 February 2000 on one or two occasions, the evidence is not entirely clear, and sought an explanation for what had transpired.

51    It is common ground that his manner was somewhat hostile and it is common ground that he was directed by Darren Scott to take an extra week off and to report to work on Monday 6 March 2000 for the purpose of discussing the events which had recently transpired.

52    Darren Scott maintains that he had no intention of dismissing the applicant from the company's employ but:

"Because of the applicant's hostility towards me I felt it was inappropriate for him to work as an allocator as allocators are the public face of the respondent. I could not afford to have someone hostile to me representing the respondent. This would mean there would have to be a change in his responsibilities within the company". (Exhibit 1 par 41)

53    At the meeting between them on Monday 6 March 2000, the applicant was informed by Darren Scott of the decision to change his responsibilities within the company although, it may be observed, the recollection of each of the participants in that meeting as to precisely what was said, is considerably different.

54    The applicant maintained that he was told he would be transferred to a position of yard foreman or driver and that his employer would no longer make his car payments, pay for his fuel or provide him with a mobile phone which meant that his level of remuneration would be reduced by at least $200 per week.

55    He said the reasons given by Darren Scott for the proposed changes were that he was uncontactable and that staff were needed who were trustworthy and reliable (see pars 29, 30, 31 of Exhibit A, the applicant's witness statement).

56    He said his performance in the twelve years or so of employment with the company had been without criticism before this time and that rather than accept the changes proposed by Darren Scott, he left.

57    Darren Scott maintained that he told the applicant at their meeting on 6 March 2000 that in view of the events of the previous couple of weeks and the fact that he had not been able to contact the applicant, he was left with no choice but to place the applicant in some other position within the company.

58    His evidence was that when pressed he told the applicant:

"We'll have to discuss it further but something along the lines of yard foreman or as a driver" (Exhibit 1, par 42)

59    He said he told the applicant that a car allowance would be paid to him and that he (the applicant) would have to organise his lease payments directly with the finance company.

60    With that, according to Darren Scott's evidence, the applicant indicated he was left with no alternative and resigned.

61    Darren Scott further maintained that the invitation to discuss an alternative position within the company was a bona fide invitation and that a reduction in the applicant's rate of pay was neither discussed nor intended.

62    Further, the position of yard foreman which was mentioned as a possible alternative for the applicant was not fundamentally different from the allocator position and according to Darren Scott's evidence, was in fact a move sideways and not a demotion.

63    The applicant's evidence was that the yard foreman position was answerable to the allocator within the company hierarchy, that it did not come with a car allowance and that like the position of driver, it would be a demotion for him.

64    The question whether the applicant was constructively dismissed as he alleges turns largely on proper application of the relevant principles to the facts of this case.

65    In Allison v Bega Valley Council (1995) 63 IR 68, the general principles were stated in this way:

"It is a trite observation that a contract of employment like any contract can come to an end in a number of ways. Termination can be `by' the employer where an employee is `dismissed' either with notice in accordance with the provisions of the contract or without notice in the event of serious and wilful misconduct. Both the employer and the employee may mutually agree that the contract of employment should come to an end. In other cases the employee may bring about the termination by resigning.

In some cases the circumstances in which the termination comes about makes it difficult to determine whether there was termination `by' the employer or the employee. There are cases where the courts, after analysis, have determined that although on the face of it an employee has resigned and brought about the termination of the contract of employment, in reality the conduct of the employer has compelled or unduly influenced the employee to resign. The most quoted example is an assertion by an employer to an employee to the effect that the employee must resign or he or she will be dismissed. The situation is commonly referred to in text books and decided cases as a "constructive dismissal", that is in effect the employer has brought about the termination of the contract of employment.

Although the term "constructive dismissal" is quite commonly used it can deflect attention from the real inquiry. That should involve an analysis of what occurred. Did the employer behave is such a way as to render the employer's conduct the real and effective initiator of the termination of the contract of employment and was this so despite on the face of it the employee appears to have given his or her resignation?

It is obvious that a consideration of these matters must be made on a case-by-case basis and that an attempt to formulate principles in the absence of particular facts will not assist in the overall determination of this issue.

In order to undertake the necessary analysis it is necessary to look carefully at all relevant facts. It is necessary to determine whether the actual determination was effectively initiated by the employer or by the employee particularly where the dynamic within a factual situation may change. For example, an employee may ultimately be genuinely pleased with the outcome of those negotiations to the extent that any resultant resignation may be said to be given freely and without any undue influence being brought to bear by the employer.

Where an employee initiates the termination of the contract of employment it is necessary to consider whether that ostensible act of termination was given freely and without any undue pressure. If the ostensible resignation is, in effect, a response to and consistent with a desire by an employer that such resignation be forthcoming, then what has occurred may be that the termination has been brought about by the employer and that in this way the employee has been dismissed.

66    Clearly in this case, there was tension between the applicant and his employer at the time of and in the period of weeks leading up to the termination of the employment contract.

67    There was a misunderstanding, to again put it neutrally, as to the duration of the applicant's absence on leave and an inability on the part of the employer to make contact with him in the interests of clarifying the matter.

68    The employer's frustration in this regard of which Darren Scott spoke in his evidence is in a sense understandable when one considers the very obvious day to day demands of running a business in the absence of one of the key players.

69    The unilateral withholding of the applicant's wages, however, and later their payment in full into the bank account of the applicant's ex-wife do not seem to me to be the reasonable act of an employer who is merely intending to re-establish lost contact with an employee.

70    Likewise, the unilateral alteration of arrangements for the payment of car lease payments by the employer at a time when on Darren Scott's admission the relationship with the applicant was strained was in my opinion more than mere coincidence and when taken together with other matters such as the declared intention to remove the applicant from his substantive position as allocator is indicative of this employer behaving in such a way as to render the employer's conduct the real and effective initiator of the termination of the employment contract notwithstanding that the applicant resigned.

71    The applicant's hostility towards his employer in the face of such conduct is unsurprising and I would find it difficult to imagine, on the evidence as it stands, how in the light of the employer's conduct, the applicant would feel otherwise than compelled or unduly influenced to resign.

72    One may asked rhetorically why the applicant would resign of his own volition from employment he had held for twelve years or so if as Darren Scott said, it was clearly explained to him that he was not being demoted or financially disadvantaged. It is more likely, I think, that the applicant's perception as to those matters was well founded.

73    The attack mounted by the employer on the applicant's character and his past performance in justification of any dismissal found to have occurred falls well short of the mark, as I am disposed, when one considers the totality of the evidence.

74    Certainly, the applicant misled Darren Scott as to his reasons for wanting holiday leave and without in any way condoning the giving of intentionally false and misleading information in that regard, it would seem to me without much more to be far from an action which could be said, as the respondent contends, to have destroyed the employment relationship and justified or warranted dismissal.

75    In this regard, it is submitted by the applicant's counsel and with respect I agree that the test adopted in Blyth Chemicals v Bushnell (1933) 49 CLR 66 at 81-82 is relevant:

"Conduct which in respect of important matters is incompatible with the fulfilment of an employee's duty, or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between the employer and employee, is a ground of dismissal. (Boston Deep Sea Fishing and Ice Co. v Ansell (1888) 39 Ch. D.399; English and Australian Copper Co. v Johnson (1911) 13 CLR 490; Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359). But the conduct of the employee must involve the incompatibility conflict, or impediment, or be destructive of confidence. An actual repugnance between his acts and his relationship must be found. It is not sufficient that ground for uneasiness as to his future conduct arises."

76    Similarly and as much is helpfully and properly conceded by Mr.Allen of counsel for the employer, the applicant's action in inducing a workmate to falsely declare that he was driving the applicant's car at the time it was damaged in September 1999 (Exhibit 5) could not itself justify dismissal although again, it should not be taken that such action for whatever reason it was carried out, is to be condoned.

77    The employer's allegation, strenuously resisted by the applicant, of consistent failure on the applicant's part to attend for work at the nominal starting time of 3am emerged from an analysis by the employer of computerised records showing among other things, the times at which the office security system was switched off in the mornings in the six months or so preceding the termination of the employment contract. (Exhibit 2)

78    The analysis of the records took place after the applicant ceased employment but is nonetheless relied upon by the employer in justification of any dismissal found to have occurred.

79    The difficulty faced by the employer, however, is the fact which clearly and compellingly emerged from the applicant's cross-examination evidence and that is, that the disabling of the office security system to gain access to the office was routinely carried out by the applicant after he had attended to other duties in and around the yard and warehouse and thus was not in any way a reliable indication of the time of his arrival at the start of each working day.

80    Thus whilst the authorities may readily permit knowledge of wrongdoing or misconduct emerging subsequently to a dismissal to be used in justification for the dismissal (see for example Byrne v Australia Airlines Ltd (1995) 185 CLR 410; Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359), it remains the task of the employer who raises the allegation to satisfy the necessary standard of proving that such wrongdoing or misconduct occurred.

81    In this case I am not satisfied on balance that it did.

82    I accept the applicant as a witness of truth and reliability and where his version of events is in conflict with other evidence in the case, I prefer it.

83    I am of the view and find accordingly, that the applicant's resignation on 6 March 2000 was in response to and consistent with a desire by the respondent employer that such resignation be forthcoming and that in this way the applicant was dismissed.

84    I find the dismissal was harsh, unreasonable and unjust and turn now to consider a remedy at the same time expressing the view in all the circumstances, that even if the applicant was seeking reinstatement (which he is not) it would in my judgement be impractical given among other things the size of the employer and the breakdown in the personal relationship which occurred in the course of the termination of the contract of employment.

85    To his credit, the applicant quickly went about his quest for alternative employment and in fact, would seem to have received three offers of employment one of which, Lennon's Transport, he accepted a week after leaving the respondent and was still there at the date of trial.

86    The employment at Lennon's Transport remunerates the applicant at roughly the same wage but does not include a car allowance or a mobile phone or fuel allowance. As a consequence, the applicant would seem to be in the order of $200-$300 per week worse off than when in the respondent's employ.

87    Conversely, he chose for personal reasons to decline higher paid work at J & J Robinson Transport and at Lambridge Transport Company and I bear those matters in mind in assessing the appropriate compensation.

88    I award the applicant the sum of $6,000 pursuant to s89(5) of the Act and order the respondent employer to cause that amount to be paid to the applicant within 21 days of the date of this decision.

LAST UPDATED: 26/02/2001