Zerafa v Campbelltown Tennis Club [2005] NSWIRComm 1118 (27 July 2005)

Last Updated: 28 July 2005

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Zerafa v Campbelltown Tennis Club [2005] NSWIRComm 1118

FILE NUMBER(S): 5794

HEARING DATE(S): 09/05/2005, 29/06/2005, 12/07/2005

DECISION DATE: 27/07/2005

PARTIES:

APPLICANT

Susan Lillian Zerafa

RESPONDENT

Campbelltown Tennis Club

JUDGMENT OF: McLeay C

LEGAL REPRESENTATIVES

APPLICANT

Mr C Acev

Australian, Liquor, Hospitality and Miscellaneous Workers' Union, Liquor and Hospitality Division, NSW Branch

RESPONDENT

Mr J Oliveux and Mr S Schmitke

The Registered Clubs Association of New South Wales

CASES CITED: Pastrycooks Employees, Biscuit Makers Employees and Flour and Sugar Goods Workers Union v Gartrell White [No.3] (1990) 35 IR 70

Wang v Crestell Industries Pty Ltd (1997) 73 IR 454

Electricity Commission of New South Wales t/as Pacific Power v Nieass and Others (1995) 81 IR 46

LEGISLATION CITED: Industrial Relations Act 1996

Workplace Video Surveillance Act 1998

JUDGMENT:

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

CORAM: MCLEAY C

27 July 2005

Matter No IRC 5794 of 2004

Australian Liquor, Hospitality and Miscellaneous Workers Union, New South Wales Branch (on behalf of Susan Lillian Zerafa) and Campbelltown Tennis Club

Application by Australian Liquor, Hospitality and Miscellaneous Workers Union, New South Wales Branch on behalf of its member Susan Lillian Zerafa re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996

DECISION

[2005] NSWIRComm 1118

1 This is an application by the Australian Liquor, Hospitality and Miscellaneous Workers Union, New South Wales Branch on behalf of Susan Lillian Zerafa for unfair dismissal against Campbelltown Tennis Club pursuant to section 84 of the Industrial Relations Act 1996. The application shows that Ms Zerafa was employed by the Campbelltown Tennis Club from January 1995 until her dismissal on 16 September 2004. She was a part-time level 3 employee.

2 The dismissal was for alleged fraudulent activity. While Ms Zerafa did not deny the activity, she denied that it was fraudulent or that it was outside the normal practices and procedures of the club. She says she was never advised that her conduct of providing post mix drinks to staff was inconsistent with the club's policy. She suggested in her application that her employer did not consider other lesser forms of discipline.

3 Evidence from Mr Brian Robinson was that he was employed by the club from 4 December 1984 to 9 July 2004, first as bar supervisor and then as bar manager. He said it was not uncommon during trading periods for staff, other than the one appointed, to use the tills. He said there were a number of practices in regard to tips and no set procedure. It was understood, he said, that coins left on the bar were a tip for bar staff. He also said that he recalled occasions where staff would correct a recording on the till known as an "over ring" by not recording a similar item from the next sale. He said that over rings were normally adjusted for common items like beer or soft drink sales. He said that the number of difficulties increased significantly after August 2003 when the club installed new touch screen tills with service calls being placed almost weekly.

4 From the time that he commenced employment in December 1984, Mr Robinson said that staff were never required to pay for post mix. He said it was not uncommon for staff to have post mix drinks prior to starting work particularly on a hot day and that they were never charged for it. He said kitchen staff also were allowed jugs of post mix. Staff drinks were also allowed after work, he said, and these were recorded and rung up on the till at the end of the day. Mr Robinson said he did not recall any memorandum or policy statement being issued to staff prohibiting the practice by staff of not being charged for post mix.

5 Mr Robinson also attested in his written witness statement that during his employment at the club he had never been formally disciplined or counselled prior to Mr Martin's appointment in March 2004. However, in cross-examination when his attention was drawn to a memo dated 31 July 1990, Mr Robinson admitted that he had been formally counselled and given a final warning at that time. He had been given a verbal warning by Mr Martin, although he rejected the alleged attitude problem which was the subject of the warning. Mr Robinson said that his departure from the club was not due to any disciplinary action by the club against him, but that his position as bar manager had been made redundant.

6 Ms Zerafa's employment history was such that she could only recall ever being given one formal written warning, presented by the then CEO, for till discrepancies. She had refused to sign the written warning because at the time there was no policy regarding the assignment of an individual staff member to a till and it was common practice, as confirmed by Mr Robinson's testimony, that more than one staff would use a till.

7 On 13 September 2004 a letter was delivered to Miss Zerafa's home. She contacted the union and was informed that a meeting had been arranged for Thursday 16 September at the club at 10am. At the meeting Mr Maxworthy of the union attended with Ms Zerafa. Mr Schmitke of the Registered Clubs Association, Mr Martin the Club Chief Executive Officer and Paul Irwin, the Club President were present.

8 The letter advising Ms Zerafa of the meeting reads as follows:

Effective from today's date you are officially suspended with full pay pending a full investigation into a number of incidents relating to fraudulent activity in the club while on duty.

The club is treating this as an extremely serious matter, even to the extent that one of the options that will be considered by the club is dismissal for fraudulent activity.

You will be given the opportunity with your representative to address the abovementioned issues at a date to be fixed by both parties.

If you have any questions in relation to the suspension please contact me here at the club as I am only too willing to assist.

9 The fraudulent activity referred to in the letter was not charging staff for post mix, not ringing up drinks correctly and supposedly pocketing club money. At the meeting Mr Martin ran some video footage which allegedly showed such activity. The video footage was obtained from overt video surveillance of the workplace, of which all staff had been given prior notification by means of a memorandum, and Ms Zerafa had been personally notified during a meeting with the respondent. I am satisfied that the production or use of the video did not offend the provisions of the Workplace Video Surveillance Act 1998.

10 The relevant video footage was viewed as part of the proceedings in this matter, incorporating a number of examples which were shown to Ms Zerafa at the meeting on 16 September. Mr Schmitke said that further examples were available but that during the meeting Mr Maxworthy said it was not necessary to see any more. Ms Zerafa recalled that Mr Maxworthy had said that what he had seen had not been conclusive proof of any fraud and did not justify any dismissal occurring.

11 In her witness statement Ms Zerafa said that after a brief adjournment Mr Maxworthy asked the club if they would consider allowing her to resign and paying her pro rata long service leave. She then said, "this was responded to by a resounding and immediate 'no' from Mr Martin, the next statement from the club was that I was to be dismissed." Under cross-examination Ms Zerafa admitted that Mr Maxworthy had put an offer on her behalf and then came and told her that the club were not agreeing and that she could not be certain who it was that said no.

12 Ms Zerafa said that Mr Irwin, the Chairman of the Board, told her that he could not reconsider the decision because the board had made up their minds. When it was pointed out to her this was contrary to Mr Irwin's statement, she said that he was lying.

13 I am concerned that throughout the proceedings, and indeed throughout her employment, Ms Zerafa refused to accept any responsibility for any wrongdoing. She referred to refusing to sign a written formal warning in regard to till discrepancies, however this warning followed a series of meetings and documents being exchanged and discussed with Ms Zerafa in the presence of, and presumably with the advice of, her union representative. She continued to display a total lack of responsibility for her actions throughout the proceedings.

14 The video footage obtained through the surveillance cameras that were fully visible, and of which I am satisfied the staff in general and Ms Zerafa in particular were given due notice, showed very clearly that Ms Zerafa was not doing her job in an appropriate manner. For example, if she served three drinks she might ring up two. At worst she was stealing from her employer. At best she was so totally incompetent that a series of such incidents occurred on a single shift and over a period of shifts. Her explanation was that she may have failed to record a drink or another staff may have recorded an extra drink and they would make a correction on a later sale to cover for themselves or each other. She said, "we'd work it out, how to make it up and we do it. We make up another drink or where we went wrong. It might have been a middy and a soft to make up the difference." When asked, "So Mrs Zerafa what you're saying is the items actually that you have recorded on the register don't necessarily reflect what is actually sold. Am I right to say that?" She replied, "Yes".

15 Ms Zerafa admitted having previously been warned with respect to discrepancies and variances with the till but her evidence seemed to completely disregard such discrepancies and to disregard the warnings that she had been given. She agreed that she accepted monies from a member or guest of the club for items that she dispensed and did not record those items as dispensed on the till.

16 Taking one example from the video footage, Ms Zerafa's evidence was very specific - that she definitely recorded a particular transaction at 5.29pm on 7 September 2004 where she only rang up one schooner because of an over ring. This contrasts starkly with the vagueness of her recollection in regard to the rest of the footage, and cannot be accepted as accurate. Mr Martin gave evidence as to the appropriate procedure whereby an over ring is adjusted by a supervisor. In circumstances where Ms Zerafa had been counselled over a lengthy period about till discrepancies, she should have been highly motivated to use the prescribed method of adjusting an over ring. It is not feasible that an employee who has been extensively counselled about the requisite practices would then be willing to adjust an over ring for another member of staff, as was suggested in evidence. It is also clear that the Club was not so busy, during the periods that were shown on the video recording, that the proper procedure for correcting over rings could not have been implemented.

17 Ms Zerafa offered a range of excuses for apparent misconduct in not ringing up sales, for example: that they were staff drinks provided to customers who may have been drinking with a staff member; that she may have been correcting an over ring for herself or another member of staff; that she forgot to ring up a transaction when she had accepted money from a customer. I cannot accept these as genuine. Her final appeal at the meeting of 16 September 2004, that she should not be dismissed over "a few little mistakes" is absurd in the totality of the circumstances.

18 The circumstances taken into account by the Club included Ms Zerafa's counselling about her errors over a period of three years, concerns expressed by other members of staff, memoranda to all staff regarding a range of practices and procedures, an investigation of the particular concern raised in September 2004 including the video footage, and Ms Zerafa's responses to those concerns at a properly convened meeting with her union representative present. Further, there was no evidence to suggest that Ms Zerafa was treated unfairly at any time by the Club. There was no evidence to provide doubt as to the accuracy of the till during the periods covered by the video footage.

19 That other staff were using Ms Zerafa's till without authorisation between August 2001 and August 2003 bears no impact on the dismissal. She was counselled, but not dismissed, during this period. After the introduction of computerised touch-screen tills in August 2003, I am satisfied that any difficulties with the tills had been attended to by the Club on the following bases: Mr Irwin referred to "hiccups" when the system was installed (consistent with the evidence of Mr Robinson), which had been overcome; Mr Martin gave evidence as to their reliability; the video footage showed no incidences of computers 'freezing' or other difficulties during the relevant period. I am not satisfied that any difficulties Ms Zerafa experienced with the tills during the periods shown on the video footage were such as to excuse or condone her behaviour. The touch-screen tills require each employee to swipe the personal identification card for each transaction, removing the concern about shared tills and providing a more secure and accurate record of till usage.

20 As to the video footage, it is noted that Ms Zerafa was shown only a limited number of excerpts during the meeting on 16 September, because her union representative said they had seen enough. The Club had some 25 excerpts available from footage taken during four shifts, on 7, 8, 10 and 11 September. I accept Mr Acev's submission that excerpts not viewed are likely to show more of the same type of incident, rather than new or fresh types of conduct. I do not accept Mr Acev's further submission that the video references should not be viewed in isolation, particularly because of the amount of footage available to be viewed and not relied upon by the union, either at the time of dismissal or during these proceedings. I am satisfied on the evidence shown during the proceedings that the Club's decision to consider dismissal, arising in part from the footage, was valid.

21 Ms Zerafa claimed that she may have served a staff drink to a customer in some instances recorded on video, explaining why she served two drinks and only rang up one. According to the evidence of other witnesses, this may have been the case, but I am satisfied that it was unlikely. In any case, accepting that she did so, she made no attempt to follow the correct procedure of recording the staff drink on a pink sheet and having it signed for or alternatively, writing the name of the staff member on the sheet. The procedure was referred to in a memorandum of 8 June 2004 and Ms Johnson explained it in her evidence. There was no evidence that Ms Zerafa was unaware of the procedure.

22 The argument that Ms Zerafa acted in accordance with common practice is also contrary to the express directive of the then Chief Executive Officer as contained in the memorandum. A reminder was issued on 29 June 2004. After this time, it was abundantly clear to staff that the policy was to be enforced and that past practices were no longer acceptable. Ms Zerafa was not dismissed for breaching a particular policy in relation to staff drinks. Her conduct, as recorded, showed a series of incidents of not ringing up drinks, the sheer quantity of which could not be satisfactorily explained.

23 Mr Acev's submission that Ms Zerafa forgot to ring up two beers (when the sale was interrupted to serve another customer) was not credible. In the normal course of events, an experienced employee does not forget to record sales. It was in circumstances where a number of incidents occurred over a relatively short period of time:

· the sale of two beers was not recorded nor money placed in the till,

· the till drawer was left open on two occasions and

· the sale of one beer was recorded when two were sold.

It could equally be claimed that Ms Zerafa should not have been dismissed because she forgot to close the till drawer or forgot to register two beer sales instead of one. In my view, she should not forget to do these things that are basic to the position she had held for over nine years, and no exceptional circumstances were raised to justify her conduct.

24 In considering the termination of Ms Zerafa's employment, the Club wrote to Ms Zerafa to suspend her pending investigation. They gave her three days notice of the disciplinary meeting, in accordance with the provisions of the Disputes Settling Procedure contained in the Club Employees (State) Award. She attended with a representative from her union, Mr Maxworthy. Two issues arise from the notice given to Ms Zerafa: firstly, the Club acted in accordance with its obligations and secondly, I do not accept that Ms Zerafa was "traumatised" at the meeting as Mr Acev submitted, rendering her unable to respond "reasonably and cogently" to the issues put to her.

25 The letter of termination set out the reason for dismissal as 'fraudulent activity'. Mr Acev submitted that there was no evidence of theft directly attributable to Ms Zerafa. However, Mr Irwin, on viewing the video footage, formed the view that Ms Zerafa was guilty of fraudulent activity, including theft, by not ringing up the correct amounts for drinks provided to customers. He was not swayed from this view. Apart from the video footage, the evidence shows that the Club was aware of till variances, stock discrepancies, instructions to all employees issued via memoranda and specific guidance provided to Ms Zerafa in disciplinary interviews as to the expectations and requirements of her in the discharge of her duties.

26 Mr Acev said that Ms Zerafa's employment history showed only one formal written warning, and no issues raised with her between July 2003 and September 2004. With this background, he submitted that the respondent acted harshly to the issues in contention in September 2004. I am satisfied that the allegations of misconduct arose directly from the applicant's conduct in September 2004. While the respondent was aware of previous warnings or counselling, in my view they did not need to rely on Ms Zerafa's history because of the nature of her behaviour over the days prior to her dismissal.

27 Mr Oliveux conceded that in this case the respondent carries the burden of proving that the dismissal of the applicant was not harsh, unjust or unreasonable. The standard of proof required when an employee is dismissed for criminal conduct is well established, being the civil standard, not the criminal standard. In Pastrycooks Employees, Biscuit Makers Employees and Flour and Sugar Goods Workers Union v Gartrell White [No.3] (1990) 35 IR 70 at 83-84, Hungerford J, said:

It is undoubted, in my view, and as Mr Walton conceded, that the onus for making out a case to warrant the intervention of the Commission in ordering reinstatement is on the claimant union: see Re Barrett and Women's Hospital Crown Street [1947] AR (NSW) 565; Re Municipal Employees, Greater Newcastle (Wages Division) Award (Re Wallace) [1949] AR (NSW) 868; Western Suburbs District Ambulance Committee v Tipping [1957] AR (NSW) 273 at 279 and Homebush Abattoir [1966] AR (NSW) at 386. However, it is also undoubted, in my view, that where an allegation of misconduct is raised as a defence or as justification for a particular course of action by an employer, such as in summarily dismissing an employee, then the legal burden, in an evidentiary sense to establish that fact, shifts from the union to the employer: see WD & HO Wills (Australia) Ltd v Jamieson [1957] AR (NSW) 547 at 552, 553; North v Television Corporation Ltd [1976] 11 ALR 599 at 602; Flynn v JC Hutton Pty Ltd (1982) 3 IR 413 at 414; Williams v Printers Trade Services (1984) 7 IR 82 at 84; and Wallace v Deering Auto Electrics (1985) 12 IR 34 at 35.

28 Whilst the standard of proof in unfair dismissal cases requires that matters be proved on the civil standard and not on the criminal standard it is necessary in cases where, as here, dismissal is for criminal conduct, that the balance must weigh more heavily in favour of the allegation of misconduct than would otherwise be the case.

29 In Wang v Crestell Industries Pty Ltd (1997) 73 IR 454 at 463-4, a Full Bench of the Commission said:

The principle applicable in relation to the onus and standard of proof in a reinstatement case concerning summary dismissal for serious misconduct involving criminal activity by the employee is that the employer must establish, to the reasonable satisfaction of the Commission, that the employee was guilty of the misconduct alleged. The onus of proof in such a case is on the employer and the standard of proof must be such as to enable a positive finding that the misconduct occurred. The standard is, of course, the civil and not the criminal one, but the requisite degree of satisfaction must have regard to the seriousness of the alleged conduct and the gravity of the consequences of the finding. The satisfaction must be such as to warrant a positive finding of the type referred to by the High Court of Australia in M v M (1988) 63 ALJR 108 and by Dixon J in Brigginshaw v Brigginshaw (1938) 60 CLR 336 at 362. See also Shop, Distributive and Allied Employees' Association, NSW Branch v Jewel Food Stores (1987) 22 IR 1 and Coles Myer Ltd v Shop, Distributive & Allied Employees Association (NSW) (1989) 27 IR 299.

We should further observe that the evidence in a reinstatement case involving criminal activity may well establish that the employee was guilty of conduct which, whilst falling short of criminal conduct, nevertheless constitutes serious and wilful misconduct justifying dismissal and refusal of reinstatement.

30 Thus Mr Oliveux's submission - that the absence of a criminal charge against Ms Zerafa does nothing to cause a finding against the Club by the Commission - is entirely appropriate. When Mr Irwin gave evidence under cross-examination that he thought Ms Zerafa was deliberately not ringing up sales accurately, I accept that he made a judgement that was entirely reasonable based on his years of experience as a Director of the Club since 1996 and President since November 2002 and relying on the efforts the Club had been through to assist Zerafa to understand her responsibilities.

31 The decision of the Club to dismiss Ms Zerafa was reasonable in all the circumstances and, on the basis of the evidence available to them at the time of making their decision, was not unjust.

32 In determining whether a dismissal was harsh in the face of alternative penalties, the Full Bench in Electricity Commission of New South Wales t/as Pacific Power v Nieass and Others (1995) 81 IR 46 at 72 said this:

There remains the Commissioner's decision that in the circumstances the decisions were harsh. Included in these circumstances the Commissioner included length of service, their disciplinary history, their unchallenged good work performance and the effects of their dismissal on their personal and family life.

All these matters are appropriate to consider and weigh in the balance. Where the offences are not serious or of moderate seriousness, such consideration may weigh down the balance in favour of the dismissed employees. It depends on the facts of the particular case. Unfortunately no one has said that these offences were not most serious. To deliberately and co-operatively seek to subvert the security of the Time and Attendance system for gain, strikes at the fundamentals of employment. We do not consider that on balance a case has been made out that the dismissals were harsh so as to enable the Commission to exercise its discretion to reinstate the dismissed employees, or that a finding that the dismissals were harsh was available to the Commissioner.

33 In this case, the offences carried a significant level of seriousness in that police were called and carried out some investigation, although charges were not laid against Ms Zerafa. Still, Mr Irwin maintains that Ms Zerafa deliberately recorded fewer sales items than she should, inferentially removing money from the premises that belonged to the Club. Ms Zerafa's age and length of service were known to the Club, as was her employment history which, unlike the case in Pacific Power, was not one of "unchallenged good work performance". It follows that the decision to dismiss Ms Zerafa was not harsh.

34 In summary, having considered all of the evidence before me and the submissions of the parties, I find that the dismissal of Ms Zerafa was not harsh, unreasonable or unjust.

35 Accordingly, the application is dismissed.

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LAST UPDATED: 27/07/2005