Abbott and Etherington v Houghton Motors

The employment of the applicant is deemed to have continued for all purposes from 19 December 1995 to the date of reinstatement in accordance with this order.

Within 14 days of the date of this order, the respondent pay to the applicant his loss of remuneration at the rate of $615 per week, less PAYE taxation at the appropriate rate, from 2 January 1996 to the date of reinstatement, less $500.

If the amount to be paid pursuant to order 4 cannot be agreed, there be liberty to apply on not less than 48 hours' notice to the other party.

I direct that the District Registrar cause to be delivered to Ms Kristine Berry and Mr Damian Taylor, personally, a copy of the judgment and direct their attention to the section in the judgment headed "Ms Berry's Evidence".

NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY SA 1775 of 1995 B E T W E E N: STEPHEN fearnhead

This is an application under section 170EA of the Industrial Relations Act 1988 ("the Act"). The applicant claims that his employment with the respondent ("Bakers Delight") was terminated in contravention of the Act and seeks reinstatement to his position as a level 2 baker under the Breads and Yeast Award.

It was agreed that Mr Fearnhead's employment commenced on 12 October 1995 and ceased on 19 December 1995. However, the respondent alleged that it did not terminate the employment relationship, but that Mr Fearnhead resigned from his position. The respondent also submitted that if it had terminated the employment of Mr Fearnhead and such termination was in contravention of the Act, then reinstatement ought not be ordered because it was impracticable: section 170EE(2) of the Act.

The applicant's employment with the respondent generally took place at the Munno Para store of the respondent. This was a store at which the respondent baked bread and cakes (which was given the generic term "production" by witnesses in their evidence) and sold the production to the public. Mr Fearnhead's duties were, generally, to assist a qualified baker in the production.

The applicant gave evidence in support of his case and through his counsel called a number of witnesses. These were Mr Paul Marchant, currently a Bakers Delight franchisee and formerly an employee of Bakers Delight; Ms Katherine Evans, the sales manager of production at the Munno Para store; Ms Maria Brigante, a shop assistant at the Munno Para store; Mr Wayne Prideaux, a baker who was at the relevant time employed by Bakers Delight and generally working at the Munno Para store; and Ms Wendy Fearnhead, the wife of the applicant, who witnessed at least part of a relevant conversation on 20 December 1995.

The respondent called as witnesses Mr Damian Taylor, then the state manager of the respondent and now the manager of the respondent with responsibility for both South Australia and Western Australia, and Ms Kristine ("Kris") Berry, currently a franchisee of the respondent and, at the relevant time last year, an employee of the respondent. Due to one aspect of Ms Berry's evidence, I allowed Mr Symeonakis, for the applicant, to recall the applicant, Ms Evans and Ms Brigante to give evidence after the close of the respondent's case. In the particular circumstances, which will be described later, this course was permitted by section 46(1) of the Evidence Act (C'th) 1995.

Mr Fearnhead, who is currently unemployed, was born on 13 March 1961. He left school at age 16 and did an apprenticeship as a carpenter and joiner. This was successfully completed and he worked in a variety of carpentry positions in both England and Australia. For several years leading up to 1995, Mr Fearnhead had developed an irritating skin rash when his skin was exposed to the sun. In February 1995, he was referred to a dermatologist, Dr Grieve. After obtaining a skin biopsy result, Dr Grieve diagnosed cutaneous lupus erythematosus. This is an auto-immune disease. Mr Fearnhead's skin rash has been the only symptom of the disease and he has not been diagnosed with systemic lupus erythematosus. When a skin rash appears as the only symptom, the disease is commonly called discoid lupus erythematosus. Due to contracting this disease, with the major symptom of the skin disorder being exacerbated by exposure to sunlight, Mr Fearnhead was medically recommended to cease being a carpenter. He therefore did this, ceasing joint proprietorship of a carpentry business.

Mr Fearnhead's first contact with Bakers Delight came through Mr Marchant, who had been a friend of Mr Fearnhead's for a number of years. Mr Marchant spoke to Mr Fearnhead about the possibility of Mr Fearnhead pursuing a career in baking, after Mr Fearnhead had to cease work as a carpenter. In August 1995, Mr Marchant had a franchised Bakers Delight store at Craigmore, as well as being a franchise consultant, employed by Bakers Delight, to monitor the performance of a number of Bakers Delight stores in Adelaide. With financial assistance from the Commonwealth Rehabilitation Service, Mr Fearnhead commenced a period of training as a baker's assistant at Mr Marchant's Bakers Delight store at Craigmore. He found that he enjoyed the work as a baker's assistant and was taught by qualified bakers at the Craigmore store. Apart from working at Craigmore during this period, he also worked at the Munno Para store and a Bakers Delight store at Clovercrest.

Mr Fearnhead found out about the possibility of doing a baker's apprenticeship but was rejected. Subsequent to this, a position became available to work for Bakers Delight at the Munno Para store as a level 2 baker under the Breads and Yeast Award. Mr Fearnhead was accepted for the position. As stated, the position commenced on 12 October 1995. Mr Fearnhead received from Mr Taylor a letter of appointment dated 10 October 1995, confirming Mr Fearnhead's bakery position at the Munno Para store, commencing on 12 October 1995.

"The agreed wage will be that set down for a level 2 baker under the Breads and Yeast Award, which is paid fortnightly into your chosen bank account. Your position will be reviewed after three weeks on Thursday, 2 November 1995, pending your performance over the previous three weeks. Once you are completely competent and capable of for (sic) filling the standards we expect at Bakers Delight in terms of bread production, through feedback from Wayne Prideaux (Bakery Manager), you will then be considered a level 3 baker with Bakers Delight. You will be expected to reach this level by Thursday, 30 November 1995. We look forward to a challenging working relationship."

Attached to the letter of appointment was a signed acknowledgment by Mr Fearnhead, dated 12 October 1995, that he agreed "to the terms of employment as above".

Mr Fearnhead then commenced employment with the respondent, working as a baker's assistant to Mr Prideaux at the Munno Para store. Other employees of the respondent at the store were Ms Evans and Ms Brigante, who were involved in selling to the public.

Mr Fearnhead's employment generally covered working from Monday to Saturday inclusive from about 2 am, finishing at about 9 - 11 am. Over time, the hours that Mr Fearnhead had to work decreased. He attributed this to becoming more experienced with baking and it therefore taking less hours to complete the job with Mr Prideaux. However, as Christmas approached, the hours of work increased again. Because the number of hours varied, Mr Fearnhead was not paid a predetermined wage, with the level of his wage being determined under the award by the number of hours worked. He did say, however, that he was grossing between $1,200 to $1,300 a fortnight, which was about $1,000 net per fortnight.

He said that he was enjoying the work and enjoyed working with Mr Prideaux.

In his evidence, Mr Prideaux said that Mr Fearnhead's work effort was good and that, considering Mr Fearnhead's background had been from a different trade, he picked up baking quickly, to assist in making a good product. Mr Prideaux said that Mr Fearnhead was very easy to get on with.

Mr Taylor is currently the regional manager for the respondent for South Australia and Western Australia. He has been employed by the respondent for about three and a half years. He had been a franchisee of the respondent prior to that. Mr Taylor is responsible for the running of the respondent in South Australia and Western Australia, and reports to the head office of Bakers Delight in Melbourne. There are currently about 250 Bakers Delight stores in Australia, of which about 32 are in South Australia. Mr Taylor's responsibility with respect to Western Australia commenced about three months ago.

With respect to the 32 stores in South Australia, two are owned and operated by the Adelaide office of the respondent, and staffed with employees from the respondent. The other 30 stores are franchisees. With respect to these stores, the employees are employed directly by the franchisee. The two stores which Bakers Delight own and operate themselves in South Australia are the Munno Para and Para Banks stores.

Mr Taylor explained the franchise arrangement between the respondent and individual franchisees. He said that the respondent holds a head lease over the various stores and licenses to the franchisees the right to operate the stores via a franchise deed. Although the deeds were not in evidence, Mr Taylor explained that the deed gave to the respondent rights to receive royalties if a certain profit level was reached by the franchisee, and also gave to the respondent the right to terminate the franchise arrangement if the individual franchisee did not "break even". In such a situation, Mr Taylor explained that the respondent would also be suffering a loss because of its position as the head lessee of the individual store.

Mr Taylor also operates a franchised store, which he bakes at on the weekend. Mr Taylor described his role as being very much a "hands on" manager, who will at times step into the breach and bake when individual management problems create such a necessity.

In December 1995, Ms Berry was employed as a merchandising assistant in the administrative section of Bakers Delight in Adelaide. Her role was to assist a merchandising consultant by assisting with promotions and "staffing". Mr Taylor said that Ms Berry was part of the administrative team of the Adelaide office.

Ms Berry first commenced employment with Bakers Delight about three and a half years ago. Mr Taylor described the process by which she became a merchandising assistant. He said that she originally commenced work for Bakers Delight at their Marion store and that she was "one of those girls that excited people when you were around her". "She is a bundle of energy." Mr Taylor said that when the merchandising assistant's position came up, Ms Berry came to mind as a person who could fulfil that position. He said that Ms Berry's role primarily involved shop front promotions. She had previously been employed as a sales assistant at Marion.

As stated, Ms Berry is now a franchisee of Bakers Delight with a store at Greenacres. She became a franchisee at age 23, which is the minimum age at which the respondent will permit someone to become a franchisee. Mr Taylor described Ms Berry's efforts to train and gain experience in working for Bakers Delight, working without payment at times to gain experience.

There was evidence of some antipathy between Ms Berry and the employees of the respondent at the Munno Para store. Mr Fearnhead said that he had no real problem with Ms Berry, except the following. On one Sunday in early December 1995, Mr Fearnhead was, as instructed, working on a Sunday at the Munno Para store. On this day, he was working for the first time without the supervision of Mr Prideaux. He was being assisted on that day by Ms Berry and her younger brother, Mr Stephen Berry, who was apparently gaining some work experience with the respondent. Mr Fearnhead said that part of the production was burnt. He attributed blame to Ms Berry, who was working on the ovens at the time. It appears that the burning of this part of the produce did not have a major effect on the overall production for the day. Mr Fearnhead said that subsequent to that date, Ms Berry had told another employee of Bakers Delight that Mr Fearnhead had burnt part of the produce. He was quite offended by this and said that there was no need for Ms Berry to mention this, particularly when he thought that it was her fault that the produce had burnt. He said that as a result of this, he lost some trust in Ms Berry.

Mr Prideaux had more general criticisms of Ms Berry. He said that she brought tension into the Munno Para store when she attended there. He said that she would walk in and criticise the work of the employees there. Mr Prideaux said that he accepted that the employees were not simply there to be complimented, but that Ms Berry had treated them like dirt. Prior to 19 December 1995, he had mentioned the problem to Mr Taylor.

Ms Evans said that the employees at the Munno Para store were as a group having problems with Ms Berry. Ms Evans referred to Ms Berry's derogatory comments to the staff and her attitude to the bakers. She wanted to discuss this with Mr Taylor, to "air her point of view".

The disquiet of the employees at the Munno Para store with Ms Berry surfaced on 19 December 1995, as will be set out later.

Mr Taylor, in his evidence, explained that the Munno Para store was performing badly in the latter part of 1995. Mr Taylor said that the Munno Para store had the lowest turnover of any Bakers Delight store in Australia.

He said that he had two meetings involving the staff at the Munno Para store to talk about the performance of the store. He discussed with the staff ways to get the store to perform better in all areas. He said that all matters were being looked at, including staffing levels, wages, production, sales and wastage. He said that he informed the store that it was his intention not to terminate the employment of anybody, but that results needed to be lifted. He recalled one meeting in particular where he took Mr Prideaux, Ms Evans, Mr Fearnhead and, he thought, Ms Berry to a coffee shop at the shopping centre where the store was located, to discuss such issues. Ms Brigante remained at the store to sell the produce.

On Saturday, 16 December 1995, Mr Fearnhead said that Mr Marchant had come to the store and had a discussion with him. Mr Marchant had explained that the wages for the Munno Para store were considered to be too high and said that, to decrease the wages bill for that store, it was considered that Mr Fearnhead may work for two to three days at that store, and for the rest of the week at another store. Mr Marchant explained that someone from the Adelaide office of the respondent would contact Mr Fearnhead on the Monday, to discuss the situation. Mr Fearnhead said he was not that happy with what Mr Marchant had said, although he did not disagree with it. He said that he had enjoyed working where he was; it was close to where he lived and he got on well with Mr Prideaux.

Mr Fearnhead did not work on Sunday, 17 December 1995, as it was his rostered Sunday off. On Monday, Mr Fearnhead and Mr Prideaux both worked at the Munno Para store. Mr Fearnhead was not contacted by head office, as Mr Marchant had suggested would occur. In the afternoon, Mr Marchant telephoned and said that Mr Fearnhead would be required to bake on his own the following day, as Mr Prideaux was required to bake at the Bakers Delight store at Clovercrest because of another baker being unwell. Mr Prideaux had previously worked as the baker at the Clovercrest store of the respondent.

Therefore, on Tuesday, 19 December 1995, it was anticipated that the baking at the Munno Para store would be led by Mr Fearnhead, without Mr Prideaux's supervision.

Mr Fearnhead said in his evidence that he commenced work at the Munno Para store on 19 December 1995 between about 5 and 6 am. At the commencement of work, Mr Marchant assisted with the production. He left the store at about 7 am. Mr Fearnhead then continued working on his own, with the assistance of Mr Stephen Berry. According to Mr Fearnhead's evidence, at about 10.30 am, Mr Taylor arrived at the store. Prior to that, Mr Taylor had been to the Clovercrest store and spoken to Mr Prideaux. Mr Prideaux said he first saw Mr Taylor that day at about 9.30 am. He said that they had a discussion about the problems that the employees at the Munno Para store were having with Ms Berry. It was Mr Prideaux's evidence that Mr Taylor said that he was then going to the Munno Para store to talk to Mr Fearnhead about either cutting his hours or wages, and working at Munno Para for two to three days per week, and another store for two to three days per week, for the amount of $25,000. Mr Prideaux said that he took the amount that Mr Taylor mentioned, that of $25,000, to be a salary figure which was going to be paid to Mr Fearnhead.

Mr Prideaux said that after Mr Taylor left, he telephoned Ms Evans to advise her of the conversation that he had had with Mr Taylor, and mentioned what Mr Taylor had planned for Mr Fearnhead.

Ms Evans confirmed that Mr Prideaux made a telephone call to her at the relevant time, although I upheld an objection by Mr Cairney, advocate for the respondent, and did not permit Ms Evans to disclose the contents of her conversation with Mr Prideaux that morning.

Mr Taylor said in his evidence that he was intending to go to the Munno Para store that morning to assist Mr Fearnhead with the baking. However, he did not go directly to Munno Para because he knew that Mr Prideaux was at the Clovercrest store by himself. Mr Taylor said that as Mr Prideaux had not baked at the Clovercrest for a while, he wanted to make sure that everything was "okay". He there spoke with Mr Prideaux. Mr Taylor said that he did not discuss Mr Fearnhead's wages with Mr Prideaux that morning, although they did discuss the ongoing lack of performance at the Munno Para store. He said that wages (in general terms only), production and lifting sales were all discussed.

On the issue of the contents of the discussion between Mr Prideaux and Mr Taylor at the Clovercrest store on 19 December 1995, I prefer the evidence of Mr Prideaux. Mr Prideaux's evidence was given in a clear, straightforward and unaffected fashion. The answers that he gave to questions were direct and to the point and, in my opinion, without exaggeration. In contrast, there were aspects of Mr Taylor's evidence which were difficult to accept.

One of these was the unlikelihood of Mr Taylor's version of the events mentioned above being correct. If it was Mr Taylor's intention to assist with the baking at Munno Para that morning, it is difficult to see why he first went to the Clovercrest store to speak to Mr Prideaux. If he was concerned as to Mr Prideaux's progress, he could have checked this by telephone. This would have saved time in getting to the Munno Para store. As it was, he did not get to the Munno Para store until mid-morning, when a lot of the baking work had already been done.

Secondly, it is difficult to see why Mr Taylor was concerned about Mr Prideaux working at the Clovercrest store. Mr Prideaux is a fully qualified baker. He is the only fully qualified baker who gave evidence. He had also worked at the Clovercrest store previously for about a year. It is therefore difficult to conceive that Mr Taylor genuinely had any thought that Mr Prideaux would have difficulties in baking at Clovercrest that morning, such as necessitated him going to see Mr Prideaux for that purpose.

It is far more likely, in my opinion, that as stated by Mr Prideaux, Mr Taylor visited Mr Prideaux at the Clovercrest store that morning to discuss the problems that were being had with Ms Berry by the employees at the Munno Para store; and that, in the course of this discussion, Mr Taylor mentioned that he was going to attend at the Munno Para store to discuss Mr Fearnhead's wages in the terms mentioned by Mr Prideaux. The evidence given by Mr Prideaux as to the contents of the discussion with Mr Taylor that morning is supported by his action in telephoning Ms Evans.

Mr Fearnhead said that Mr Taylor arrived at the Munno Para store that morning at about 10.30 am. He said that after greetings, Mr Taylor asked him how work was going that day. Mr Fearnhead said that he explained that he was "getting there". According to Mr Fearnhead's evidence, Mr Taylor then said that there was a bit of whingeing and backstabbing involving Ms Berry, and asked Mr Fearnhead for his comments. Mr Fearnhead said that he had not been whingeing to anybody.

Mr Taylor then said that he was not there to discuss that issue, but to discuss the store, and that the wages at the store were too high and had to be reduced. Mr Taylor said that Mr Fearnhead was going to be paid $25,000 and that this was a $25,000 salary. Mr Fearnhead said that, although his fortnightly wage was not set at a precise amount, he would have then been earning in the vicinity of $32,000 per annum. Therefore, he thought a drop to $25,000 per annum was a big drop. Mr Fearnhead said that he suggested to Mr Taylor a figure of $28,000 per annum salary. Mr Fearnhead said that this was an attempt to negotiate. Mr Fearnhead said he did not know why he picked a figure of $28,000 but it was at least greater than $25,000. Mr Taylor said that the respondent would not pay $28,000. Mr Fearnhead said that Mr Taylor told him that the respondent had recently employed a "lad" who had been with them for three weeks, was baking on his own and was only being paid $20,000. Mr Fearnhead said he was not happy with this. Mr Fearnhead said that this discussion took part in the back part of the bakery. They were about four to five metres away from the front part of the bakery, although one could see through to the front part of the bakery.

At the time of this conversation, Ms Brigante and Ms Evans were both present. Ms Brigante was serving in the front part of the shop as, initially, was Ms Evans. Mr Fearnhead said that Ms Evans then came into the back part of the bakery where he and Mr Taylor were.

Mr Fearnhead said that the discussion started with voices at normal level and then got louder. Mr Fearnhead said that he had told Mr Taylor during the conversation that he could not survive on $25,000 with his wife and family to support. Mr Fearnhead said that an argument ensued which concluded when Mr Taylor said that Mr Fearnhead should go, and that he, Mr Taylor, would finish the baking. Mr Fearnhead said that he then took his hat and apron off, and threw them on the bench. He thought that his employment had been terminated. He said that he told Mr Taylor that he could not do that to somebody. There was then a further argument, in which the possible involvement of the union was mentioned, as well as Mr Fearnhead not being paid as a level 3 baker (as he argued he should have been given the terms in the letter of appointment). Mr Fearnhead said that he was going to see Mr Taylor in court. He said that Mr Taylor said that he had 220 stores to back him. Mr Fearnhead replied that he would put "his house" on it. Mr Fearnhead said that things "exploded", and that he grabbed his things and walked out.

Mr Fearnhead said that things jumped from one thing to another during the course of the argument and that at times he was not sure what the argument was about. However, he restated that it commenced with the "$25,000 business" and it was a case of "take this or leave it"; there was no negotiation and Mr Taylor indicated that if Mr Fearnhead did not like this, then he could leave. Mr Fearnhead then took his hat and the apron off, and the argument commenced again.

He said that he left the Munno Para store of the respondent at about 11.15 am. Mr Taylor remained at the store after Mr Fearnhead went home. Subsequent to that, Mr Fearnhead spoke to Mr Marchant, but I will detail this evidence later.

Whilst Mr Fearnhead's recollection of the detail of his discussion/argument with Mr Taylor that day was somewhat uncertain due to the length of the conversation, the emotion which surfaced during the conversation and it being some eight months since the conversation, I accept that Mr Fearnhead was doing his best to honestly recall what took place during the conversation. His evidence was given in a matter of fact and unexaggerated fashion. I have no reason to doubt the honesty of his evidence and consider that generally his recall of the more significant aspects of the conversation was accurate.

My assessment of Mr Fearnhead's evidence is assisted by the evidence that Ms Evans gave of the conversation between Mr Fearnhead and Mr Taylor on 19 December 1995. Ms Evans also presented as an honest and straightforward witness.

Ms Evans said that she was working at the front of the store when Mr Taylor arrived. Mr Taylor went to the back of the bakery and spoke to Mr Fearnhead. She heard a discussion about Ms Berry. After about three to five minutes, she said that she went to the back section of the bakery, where the conversation was being had, to ice some produce. She said that by then there was a conversation in progress about wages. She said that she heard Mr Taylor say something about the store only being able to afford to pay $25,000 and that Mr Fearnhead said that this was no good, he had a family to support and could not live on that. She said that Mr Taylor said something to the effect that if Mr Fearnhead was not happy, that as this was all Bakers Delight could afford, then why didn't Mr Fearnhead work until Christmas and then leave. Mr Fearnhead then asked why he should just carry on through the busy period. Ms Evans said that Mr Taylor then said, "Fine, you can just go now." She said that Mr Fearnhead then took off his "beret" and apron and put them down, and then retaliated by saying that this would not be the last that Mr Taylor would see of him; he would take Mr Taylor to court. She said that she heard Mr Taylor say that he had 200 stores behind him. She said that she heard further "banter" between Mr Taylor and Mr Fearnhead before Mr Fearnhead left.

When she was asked whom first mentioned the amount of $25,000, in so far as she heard, Ms Evans said that Mr Taylor had said that this is what could be afforded by the store as wages because wages were too high. She said that she heard Mr Fearnhead say, "What about $28,000?", but she did not recall what Mr Taylor said in response to that.

She agreed that Mr Taylor said that he was going to finish the baking at the time when Mr Fearnhead was leaving , and that this is what he did.

Ms Evans did not accept, when it was put to her in cross-examination, that she did not remain at the back of the bakery for all of the remainder of the conversation, after she first went to the back of the bakery from the front. Ms Evans said that she did remain at the back of the bakery for the rest of the conversation. She said that she went to the back of the bakery to do some icing, but she did not complete this icing and the iced produce to the front. She explained that she was so amazed at what was going on that she had iced incorrectly and therefore had not been able to take completed produce to the front of the store. This evidence rang true.

Ms Brigante, in her evidence in-chief, agreed that Mr Taylor came to the Munno Para store in the morning of 19 December 1995. She said that Mr Taylor spoke to Mr Fearnhead at the back of the bakery, whilst she was serving at the front. She said the conversation at the back of the bakery would have been about 30 feet from where she was serving at part of the counter at the front of the store. She generally did not hear what was said. She thought that Mr Taylor remained at the store for about 20 minutes with Mr Fearnhead. She said that all that she heard was Mr Taylor saying that Mr Fearnhead should "get out", and that he, Mr Taylor, would finish baking. She then saw Mr Fearnhead take off his hat and apron. She said that she was then at the back of the store where Ms Evans was. She said that Mr Taylor's tone was angry, and that both Mr Taylor and Mr Fearnhead had been talking in raised voices. She said that Mr Fearnhead left the store and she continued working.

I also have no reason to doubt the honesty and genuineness of recollection of Ms Brigante's evidence. To the extent that she was aware of what was said in the conversation, it is supportive of Mr Fearnhead's evidence.

I pause here to state that, in their evidence in-chief, neither Mr Fearnhead, Ms Evans nor Ms Brigante mentioned Ms Berry as being present during all or any part of the conversation between Mr Taylor and Mr Fearnhead that day. Further, although in cross-examination, each witness was again asked who was present during the conversation (both Ms Evans and Ms Brigante forgetting that Mr Stephen Berry was also present), it was not directly put to them by Mr Cairney that Ms Berry was present for any or all of the conversation between Mr Taylor and Mr Fearnhead that day. Further, the respondent chose not to call Mr Stephen Berry to give evidence. There was no explanation for this. Ms Berry said in her evidence, after I asked her, that Mr Berry was still resident in Adelaide and, on the day when Ms Berry gave evidence, would either have been "at uni or at home". I will later return to the subject of Mr Stephen Berry not being called to give evidence on behalf of the respondent.

In his evidence, Mr Taylor said that when he arrived at the Munno Para store on 19 December 1995, he saw Ms Evans at the front of the store, said hello and went to the back of the shop. He said that there present were Mr Berry and Mr Fearnhead. He said that he had a conversation with Mr Fearnhead. He said that Mr Fearnhead appeared stressed, and the state of the bakery "showed signs" of stress. Mr Taylor said that he did not raise the question of wages, Mr Fearnhead did. He said that Mr Fearnhead had said that he was expecting someone to talk to him on the Monday about where he was going to be placed. Mr Taylor replied that if Mr Fearnhead had a problem with this, he could have used the telephone. Mr Taylor claimed that Mr Fearnhead said that he wanted to sort out the wages issue. Mr Taylor said that this was not the time to discuss such a matter, Mr Fearnhead was too emotional to do so. He said that Mr Fearnhead wanted to sort the matter out there and then, and that Mr Fearnhead had used the word "fuck". Mr Taylor said that this "threw" him, because this was fairly early on in the discussion and Mr Taylor did not want to carry on the discussion. Mr Taylor maintained that he told Mr Fearnhead that this was not the correct time to discuss such issues; Mr Fearnhead was too emotional, tense and abrupt.

In examination in-chief, Mr Taylor said that when Mr Fearnhead continued to press the wage issue, Mr Fearnhead had said he wanted a figure that the respondent would pay him. Mr Taylor said that he told Mr Fearnhead that he could not give him a figure, but that he was under direction from Melbourne to decrease wages at the store and the amount that could be paid at the store would be around a maximum of $25,000 for the baker's assistant. Later in his evidence, particularly in cross-examination, Mr Taylor attempted to deny that he was under any direction from Melbourne about wage figures at the Munno Para store at that stage. This was directly in conflict with this aspect of his testimony, and undermines the credibility of his testimony generally. He said that he explained to Mr Fearnhead that he was not making an offer to him of $25,000 per annum but that this was all that bakery store could afford to pay. Mr Taylor said that he did not say to Mr Fearnhead that he was dismissed, sacked or terminated, but attempted to calm him down and did not use any words remotely similar to that. Mr Taylor said that at no time during the conversation did he intend to terminate the employment of Mr Fearnhead.

When asked who was present during the conversation, Mr Taylor said that Ms Brigante was not in the back part of the shop, Ms Evans vacillated between the front and back of the shop, and that Stephen Berry was "struggling along and at the back of the bakery for the whole time". As will be set out later, he did not assert that Ms Berry was present during the conversation.

Mr Taylor said that as the argument progressed, Mr Fearnhead was pressing for a counter-offer of a wage amount which Mr Taylor could not do. Mr Taylor said that Mr Fearnhead had mentioned a figure of $28,000. Mr Taylor said that Mr Fearnhead took off his hat and apron and went to the back of the store. He then made some derogatory remarks about Bakers Delight and about Mr Taylor himself. He said that Bakers Delight had a terrible record and had underpaid people, particularly for overtime. Mr Taylor replied that people were paid for every hour that they worked and that the Melbourne office sorted this out. Mr Fearnhead also said that Mr Taylor had been having problems with his own store at Blackwood and, in particular, with his relationship with the bakers there. Mr Taylor replied that he had had two bakers there for two years, so he did not know where the problems were. Mr Taylor said that Mr Fearnhead then accused Bakers Delight in explicit words and said that he would take the matter further. Mr Taylor said that he was comfortable with the way that Bakers Delight had acted. Mr Fearnhead said that he would see Mr Taylor in court and walked out. Mr Taylor said that Mr Fearnhead said he was just wasting his time and would go. Mr Taylor said that this was up to him, if Mr Fearnhead wanted to go, he should go. Mr Taylor denied that he told Mr Fearnhead to leave the shop.

Mr Taylor then finished the production and cleaned up.

In general, I regard Mr Fearnhead's account of the conversation with Mr Taylor that morning, as supported by Ms Evans and Ms Brigante and Mr Prideaux, by way of background, as far more credible than that of Mr Taylor. From the evidence of Mr Prideaux, which I have accepted, Mr Taylor had a stated intention of going to the Munno Para store to discuss Mr Fearnhead's wages with him. According to Mr Fearnhead's evidence, this is what occurred. Whilst I think Mr Fearnhead would have been agitated during this discussion and was anxious to settle on an agreed wage which he, at the time, felt he could survive on, I do not think that the conversation commenced or progressed as Mr Taylor indicated.

Given the evidence of Ms Evans and Mr Taylor, at least in examination in-chief, I think that Mr Taylor had a direction to reduce the wages at the Munno Para store for the assistant baker, to $25,000. If Mr Fearnhead was going to continue to be employed at the Munno Para store, this would obviously involve either a reduction of Mr Fearnhead's hours or paying him at rates less than the award. There is no evidence to suggest that the respondent was intending to pay Mr Fearnhead less than award rates. Therefore, Mr Taylor must have had in mind limiting Mr Fearnhead's hours of work at the store. This could either be achieved by Mr Fearnhead working elsewhere to increase his number of work hours, so as to maintain his existing wage level, or a reduction in Mr Fearnhead's wages to the amount of $25,000. As there is no evidence that Mr Taylor suggested the former in the course of the conversation, I can only conclude that Mr Taylor had the latter in mind; that is, limiting Mr Fearnhead's hours to, in effect, achieve a wage level of $25,000 per annum. I am satisfied that Mr Taylor attended at the Munno Para store that morning with the intention of, in effect, reducing Mr Fearnhead's wages to about $25,000 per annum. I am satisfied that an argument developed along the lines as described by Mr Fearnhead and Ms Evans. I am also satisfied that the argument concluded in the way that Mr Fearnhead described; that is, that Mr Taylor, in effect, said that if Mr Fearnhead was not happy with such an arrangement, he could leave and that in response to this, Mr Fearnhead did.

The next question to determine is whether, in light of this finding, there was a termination of the employment of Mr Fearnhead on 19 December 1995. I will turn to this question after a consideration of the evidence of Ms Berry about the conversation on 19 December 1995.

I have already stated that neither Mr Fearnhead, Ms Evans nor Ms Brigante said in evidence in-chief that Ms Berry was present at the Munno Para store during the relevant conversation between Mr Fearnhead and Mr Taylor on 19 December 1995. Further, it was not put to any of these witnesses that Ms Berry was present. Mr Taylor said when he arrived at the back of the shop Mr Fearnhead and Mr Berry were there (transcript 109). He later said that Ms Berry was present there at a time but "I'm not sure exactly whether it was at the conclusion of the conversation". In cross-examination, he firstly confirmed that Ms Berry was not present when he arrived at the store (transcript 135) and later said that "Kris Berry may have been there for the end of it or towards the end of it" but that he was "not 100 per cent certain" whether she arrived after Mr Fearnhead departed", "you'll have to ask Kris" (transcript 140).

When Ms Berry gave evidence, it therefore came as a surprise that she claimed that she was present for the whole of the relevant conversation. As this had not been put to the applicant's witnesses, Mr Symeonakis objected to the evidence being given. I indicated that I would not prevent the evidence being given, but would be minded to accede to any application Mr Symeonakis wished to make to recall the applicant's witnesses to give evidence on this subject.

Ms Berry's evidence was that she attended at the Munno Para store at about 9 am that day. She said that she went to that store to see her brother, who had commenced at the store that day. She said that when she arrived, Mr Taylor, Mr Fearnhead, Ms Evans and Ms Brigante were all at the store. She said that Mr Taylor was working on the dough drawers, traying up rolls, and Mr Fearnhead was working on the ovens. Ms Berry said that there was a general discussion on the running of the store and the areas to watch and that there was raised the issue of wages. She said that Mr Taylor had said that he was looking at the wages issue. She said that Mr Fearnhead took it personally when Mr Taylor said this. She said that she did not follow all of the conversation because she was talking to her brother. Ms Berry said that Mr Fearnhead was aggressive and angry. She said that Mr Taylor made no offer of a wage amount. She said that Mr Taylor was quite calm and that the discussion about wages took "not long", only about 10 minutes.

Ms Berry said that she heard Mr Fearnhead make some derogatory remarks. She said that he was rude, and called Mr Taylor something like "an arsehole", and said something like "no-one likes you". She said that Mr Fearnhead said he was going to leave and was about to walk out, and that Mr Taylor calmly said that if he wanted to go, no-one was going to stop him. Ms Berry said that Mr Taylor did not issue any directive to Mr Fearnhead to leave. She said that Mr Fearnhead then left.

Ms Berry also gave evidence that she was involved in a discussion on 20 December 1995. The evidence as to this conversation will be addressed later in the judgment.

In cross-examination, Ms Berry was asked whether she had been requested to prepare a report on what had happened concerning the alleged termination of Mr Fearnhead. She agreed that she had. She said that Mr Taylor had requested her to make the report. The report, which was tendered as Exhibit 4, was dated 8 January 1995. Ms Berry acknowledged that the date she wrote on the report was in error and should have read 8 January 1996. The report was written on a Bakers Delight communication report pad. Alongside the expression "type of contact", Ms Berry wrote "report on Steve Fearnhead".

The subject matter of the report was the discussion on 20 December 1995. The report contained no reference to Ms Berry being present at the conversation on 19 December 1995. Ms Berry could not give any explanation as to why this was so, other than to say that as Mr Taylor was present when the conversation occurred on 19 December 1995, what was said that day was obvious and therefore he did not need to be told about this. However, this also applied to the conversation on 20 December 1995 at which Mr Taylor was also present. Therefore, this was a nonsensical explanation.

Prior to the luncheon adjournment on 31 July 1996, Mr Symeonakis put to Ms Berry that she was lying about her alleged presence at the conversation between Mr Fearnhead and Mr Taylor on 19 December 1995. Ms Berry denied this and said that she could prove that she was present due to the contents of her diary. She did not then have in court her diary but said that it was in her car. She also made reference to her log book, which she said would also indicate where she went on 19 December 1995. Shortly after this, the Court adjourned for lunch. I asked Ms Berry to bring to the Court after the luncheon adjournment both her diary and her log book. She did so. A copy of the relevant extract of the diary was tendered as Exhibit 6, and the vehicle log book as Exhibit 5. The entry in the diary does not in any way prove that Ms Berry was present at the relevant conversation. The only relevant entries on Tuesday 19 December 1995 are "Stephen's first day at Munno Para" and "4 am, Munno, start". The reference to Stephen's first day is a reference to Ms Berry's brother's first day of work at the Munno Para store. The "4 am Munno start" refers to the commencement time of Mr Stephen Berry at the Munno Para store. These entries in the diary obviously do not confirm her presence at the relevant conversation. The same can be said for the log book. This records that on 19 December 1995, Ms Berry attended at the Para Banks and Munno Para stores. The log book notes that she travelled a total of 104 km. The log book does not record the time, purpose or any relevant events which occurred at the Munno Para store on 19 December 1995.

Therefore, Ms Berry's claim prior to the luncheon adjournment that her diary would prove that she was present at the Munno Para store at the time in question was false.

Upon further cross-examination after the luncheon adjournment, Ms Berry said that it could be proved that she was present at the Munno Para store and that this could be verified by speaking to her brother. As stated earlier, I asked Ms Berry as to the location of her brother that day, and received the response referred to above. Mr Stephen Berry was not called to give evidence. The respondent made no application to adjourn the trial so as to call Mr Berry. There seems, given the evidence from Ms Berry as to the whereabouts of Mr Berry, to be no reason why, if it be true, he could not be called to verify the evidence of Ms Berry that she was present at the relevant conversation and to support Mr Taylor's and Ms Berry's versions of the relevant conversation.

In my opinion, the pre-conditions to the rule in Jones v Dunkel have been satisfied, such that I can infer that Mr Stephen Berry would not have given any evidence which would have been supportive of the respondent's case, including verification that Ms Berry was present at the Munno Para store during the relevant conversation; see Cross On Evidence, Fifth Australian Edition, paragraph [1215].

Ms Berry also said that she arrived at the Munno Para store at about 9 am. As set out earlier, Mr Taylor said that he did not attend at the store until about 10.30 am. Despite this, Ms Berry claimed that Mr Taylor was already at the store and working on dough drawers when she arrived. When the contradictory part of Mr Taylor's evidence was put to her in cross-examination, Ms Berry said that she did not check her watch when she arrived but it was roughly 9 am. She insisted that she was there after Mr Taylor, and heard most of the conversation with Mr Fearnhead.

As set out earlier, I acceded to an application by Mr Symeonakis that Mr Fearnhead, Ms Evans and Ms Brigante be recalled to give evidence about the claim that Ms Berry was present at the relevant conversation on 19 December 1995.

Mr Fearnhead was in court when Ms Berry had given her evidence. He confirmed, when recalled, that Mr Taylor attended at the store at about 10.30 am that day and that he [Mr Fearnhead] left at about 11.15 am. He said that during that time, Ms Berry was not there. He said that he had not seen Ms Berry at the store between his commencement time of about 4 am and 11.15 am, when he left the store that day. In cross-examination, it was put to him that because of the conversation that he was having with Mr Taylor, he became upset and tense so that if Ms Berry had arrived, he may not have noticed this. He replied that he would have seen Ms Berry.

Ms Evans, when recalled, said that she was at work on 19 December 1995 between 8.30 am and 4.30 pm. When she arrived at work, Mr Taylor was not there but that he arrived about one hour afterwards. She said that Ms Berry arrived at the Munno Para store at about 11.30 to 12 pm. When asked why did she know that it was that time, she replied that Mr Fearnhead had left at about 11 am, and that he had left by the time that Ms Berry arrived. Ms Evans said that when Ms Berry arrived, she seemed shocked to see Mr Taylor there, and asked him what he was doing. She was certain that Ms Berry was not in the shop during the conversation between Mr Taylor and Mr Fearnhead. I asked Ms Evans whether there was any illwill between herself and Ms Berry, which had caused her to give this evidence against Ms Berry. She said there was not. I believe her evidence.

Ms Brigante, when recalled, said that since giving evidence the previous day, she had checked the roster and discovered that she had signed on at 9.30 am on 19 December 1995. She said that she had checked this because she was curious. She said that when she commenced work, Mr Berry, Mr Fearnhead and Ms Evans were working. She said that Ms Berry was not there at that stage but came to the store later. She said that Mr Taylor was not there when she arrived at the store. Ms Berry had not been at the Munno Para store before that time. Ms Berry arrived at the store between 11.30 am and 12.00 noon. When asked whether Ms Berry was at the back of the shop during the conversation between Mr Taylor and Mr Fearnhead, she said that this was not true.

In cross-examination, Ms Brigante repeated that Ms Berry had not arrived earlier than 11.30 am to 12.00 noon, because she arrived after Mr Fearnhead had left and when Mr Taylor, Ms Evans and herself were at the store. When asked whether Ms Berry could go to the back of the store without her knowing, she said that she would know because it was a small store. In her cross-examination, she repeated that the suggestion that Ms Berry was in the store during the relevant conversation was not true and that Ms Berry did not arrive at the store until 11.30 am to 12.00 noon that morning. This evidence given by Ms Brigante was clear and consistent.

Mr Cairney, in closing, submitted that Ms Brigante was unsure about times. I do not accept this criticism of her evidence, but even if this were so, Ms Brigante was clear and consistent on who was present during the relevant conversation, with the exception of her omission at recalling Stephen Berry's presence when she first gave evidence in-chief.

In addition to the evidence of Mr Fearnhead, Ms Evans and Ms Brigante on Ms Berry's non-attendance at the store during the relevant conversation, Mr Taylor did not suggest in his evidence that she was present. The furthest that Mr Taylor would go was to say that Ms Berry came to the store at some stage, that he could not recall whether it was during the conversation with Mr Fearnhead or not, and that one would have to ask Ms Berry whether she was then present. My assessment is that this was a careful attempt by Mr Taylor to make sure that he did not say anything demonstrably untrue about Ms Berry's suggested presence during the relevant conversation. However, assuming that Mr Taylor's non-recollection of whether Ms Berry's attendance was genuine, I think that this in itself indicates that Ms Berry was not present. This is because I think that if Ms Berry had been present, Mr Taylor would have remembered this. I think this because Mr Taylor said that Ms Berry was a "bundle of energy" who "excited people around her", as set out above. If such a person had been present during the conversation with Mr Fearnhead, I think that this would have stuck in Mr Taylor's mind.

Due to this, and due to the very convincing evidence of Mr Fearnhead, Ms Evans and Ms Brigante, I do not accept that Ms Berry was present during the relevant conversation. I also take into account, in making this assessment, that Mr Stephen Berry was not called to support Ms Berry's evidence, or the respondent's case generally.

In his closing, Mr Symeonakis urged me to find that Ms Berry was a liar. In a civil case such as this, I need do no more than make the findings of fact that I have set out above. However, it is difficult to escape the conclusion that Ms Berry deliberately said something to the Court which was untrue, and claimed, falsely as it turned out, that her evidence would be supported by her diary. Also, if she had been present during the relevant conversation, there is no reason why this would not have been included in the memorandum that she wrote for Mr Taylor. I therefore infer that Ms Berry's presence at the relevant conversation was an invention she made up after she wrote the memorandum on 8 January 1996.

To give deliberately false evidence in Court under oath is a very serious thing. This is especially so when somebody like Ms Berry comes to Court and is represented as a " third party" who witnessed a relevant event. Courts often take notice of what a third party says in evidence because of their supposed independence. If such people come to Court and do not tell the truth, then this undermines the judicial process.

I am not at all convinced that people always appreciate the seriousness of giving false evidence in Court. If they do this knowingly, they commit the offence of giving false testimony, under section 35(1) of the Crimes Act (Commonwealth), which is punishable by a maximum five years' imprisonment. It is not uncommon for courts to sentence to terms of imprisonment even young first offenders, for the offence of giving false testimony, because of the concern that committing such an offence undermines the judicial process. A prison sentence for a young entrepreneur like Ms Berry would obviously put a major dent in her career plans and future. I can only think that Ms Berry gave no regard to such matters when she gave her evidence, or that someone "put her up" to giving the evidence she did. There was no evidence of the latter but, for example, if someone from the respondent counselled or procured Ms Berry to give false evidence they, too, would be guilty of a criminal offence, punishable by imprisonment. Given the seriousness of these matters, I will direct the District Registrar to cause a copy of my reasons to be forwarded personally to Ms Berry and Mr Taylor, in his capacity as state manager for the respondent.

I have set out above the evidence as to what happened on 19 December 1995 and stated that I prefer the evidence of Mr Fearnhead, as supported by Ms Evans and Ms Brigante, to that of Mr Taylor and certainly that of Ms Berry. In effect, therefore, I have found that Mr Taylor did bring up the subject of reducing Mr Fearnhead's wages to an amount of $25,000 per annum. Mr Fearnhead did not want this to happen, and an argument developed. I am satisfied that Mr Taylor did say to Mr Fearnhead, during the course of the argument, that he "could go", meaning leave the employ of the respondent, and that Mr Taylor would finish the baking. I am satisfied that there was then further argument and that Mr Fearnhead said that he would see Mr Taylor in court.

It was agreed by the parties that the employment relationship ended at this stage.

The respondent's primary position was that Mr Taylor's evidence should be accepted and there was no termination of employment at the initiative of the employer. As stated, I do not accept Mr Taylor's evidence. However, Mr Cairney's supplementary position was that, even on the evidence of Mr Fearnhead, there was no termination at the initiative of the employer. He emphasised that, even on Mr Fearnhead's evidence, Mr Taylor had not used words such as that Mr Fearnhead was "terminated", "dismissed", or "sacked".

Whilst accepting this, it is clear that, for there to be a termination of the employment relationship at the initiative of the employer, it is not necessary for the employer or its representative to use such words.

From section 170EA(1), 170CA(1) and Article 3 of the Termination of Employment Convention, which is Schedule 10 to the Act, it is clear that the expression "termination of employment", when used in section 170EA(1) of the Act, means termination of employment at the initiative of the employer.

The Full Court, in Mohazab v Dick Smith Electronics (1995) 62 IR 200, whilst not giving an exhaustive definition of the meaning of this expression, said that the following were indicative of there being a termination of employment at the initiative of the employer :

1. A termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship(205);
2. The act of the employer results directly or consequentially in the termination of the employment (205);
3. The employment relationship is not voluntarily left by the employee (205);
4. Had the employer not taken the action it did, the employee would have remained in the employment relationship (205); or
5. What was the critical action, or what were the critical actions, that constituted a termination of employment (page 205, relying on the judgment of Wilcox CJ in APESMA v David Graphics Pty Ltd (1994) 1 IR 106).

Applying each of these indicia to the facts in this case, it is clear that, once I have accepted the evidence of Mr Fearnhead, the termination of employment was at the initiative of the employer. It was the employer, through its representative, Mr Taylor, that raised the issue of the reduction of Mr Fearnhead's wages to $25,000 per annum. Mr Fearnhead objected to this. An argument ensued and Mr Taylor, in effect, said that Mr Fearnhead could either take it or leave. In leaving that day, it could not be said that Mr Fearnhead was voluntarily leaving the employment of the respondent. The initiative for the termination of the employment was that of the employer, through Mr Taylor's suggestion that Mr Fearnhead's wages be reduced, and his direct invitation to Mr Fearnhead to, in effect, like it or leave.

The respondent also argued that if there was a termination of employment at the initiative of the employer on 19 December 1995, then there was an offer to re-employ Mr Fearnhead on 20 December 1995, which the Court could have regard to.

After Mr Fearnhead left the store on 19 December 1995, there was evidence of conversations between himself and Mr Marchant during the balance of that day.

In one such conversation, Mr Marchant said that the respondent would agree to pay Mr Fearnhead $28,000 per annum. Mr Fearnhead said he wanted this in writing, so that the respondent could not endeavour to go back on this. Given the events of 19 December 1995, this is understandable. Mr Marchant indicated that he would endeavour to organise this, but that the letter would have to be signed by Mr Taylor, and there may be some difficulty in organising it. Mr Marchant spoke to Mr Fearnhead again by telephone, after speaking with Mr Taylor. He then indicated that at least up until Christmas, Mr Fearnhead's terms of employment would revert to what they had been. He would work a similar number of hours as he had been and be paid the relevant hourly rate in accordance with the award. Again, Mr Fearnhead was agreeable to this but wanted it to be in writing. Again, I regard this as understandable. It was arranged that Mr Fearnhead would meet with Mr Taylor at the Munno Para store to discuss Mr Fearnhead's re-employment.

Mr Fearnhead did meet with Mr Taylor at the Munno Para store on 20 December 1995. Ms Wendy Fearnhead, and Mr and Ms Fearnhead's young daughter, were also present. It was agreed that Ms Berry was also present at the Munno Para store at the time of this conversation. The conversation commenced inside the shopping centre at the back of the store in a corridor by a doorway, and continued outside the shopping centre after the centre manager asked Mr Taylor and Mr Fearnhead if everything was all right, because of their raised voices. When the conversation continued outside, Ms Fearnhead was present during part of the conversation, and Ms Berry was called outside for part of the conversation.

The evidence of Mr Fearnhead, as supported by Ms Fearnhead, was that Mr Taylor was offering to re-employ Mr Fearnhead but on the basis that he sign a statutory declaration acknowledging that he had received two warnings from his employer. When Mr Taylor was asked what the warnings were, he replied that one was for Mr Fearnhead's conduct the day previous and one was for his conduct that day. Mr Fearnhead indicated that he did not think he deserved a warning for either day's conduct and would not sign such a statutory declaration. Mr Fearnhead said that Mr Taylor indicated that he wanted such a statutory declaration to be signed, in addition to the respondent giving to Mr Fearnhead a document in writing setting out that Mr Fearnhead would be employed on the hitherto conditions on re-employment.

Mr Taylor denied in evidence that he said he wanted a statutory declaration to be signed by Mr Fearnhead, but indicated that he wanted Mr Fearnhead to sign a document indicating that there had been two warnings. He also said he wanted an apology for the derogatory remarks which Mr Fearnhead made about Bakers Delight and himself, and that things reached a stalemate because Mr Fearnhead would not give such an apology. Mr Taylor indicated in his evidence that he thought that if the respondent was going to put in writing what Mr Fearnhead wanted, then it was only fair that Mr Fearnhead apologise to Bakers Delight and himself, and acknowledge warnings in writing.

Ms Berry's evidence was to the effect that Mr Taylor had said that he wanted an apology, and that Mr Fearnhead would not agree to an apology. She said, as was confirmed by Mr Taylor and, to some extent, by Mr Fearnhead, that part of the discussion was about the problems that Mr Fearnhead and other staff members at Munno Para had with Ms Berry.

However, I accept the evidence of Mr Fearnhead that this was not the major point of discussion during this conversation.

Mr Taylor's evidence, in denying that he required Mr Fearnhead to sign a statutory declaration acknowledging two warnings, was unconvincing, particularly in cross-examination.

In addition, Mr and Ms Fearnhead's evidence is supported by the evidence of Ms Evans in that she said in her evidence that when Ms Berry came back into the store, she said that Mr Fearnhead had "done his dash" and was finished, that he had had the opportunity to have his job back if he had signed a declaration, but had refused. Ms Berry indicated to Ms Evans that it was a declaration saying that Mr Fearnhead had been given two warnings. Ms Evans said that Ms Berry indicated to her that she thought that it was Mr Fearnhead's fault that he was not going to be coming back to work because he was being stubborn.

Ms Berry had no recollection of such a conversation and doubted that she would have spoken to Ms Evans in this way because she said that she did not get on with Ms Evans.

I accept the evidence of Ms Evans on this issue in preference to that of Ms Berry. I have stated earlier that I was impressed by Ms Evans as a witness. In contradistinction to this, I have found that Ms Berry was a witness who was totally cavalier with the truth.

In my opinion, the evidence of what Ms Berry told Ms Evans had happened during the conversation between Mr Taylor and Mr Fearnhead, outside the shopping centre, was admissible to establish the truth of what Ms Berry reported Mr Taylor had said. This is because Ms Berry was part of the administrative team of the respondent and, in effect, was the agent of the respondent in reporting to Ms Evans what had been said outside. What Ms Berry reported to Ms Evans that Mr Taylor had said outside was a declaration against the interests of the respondent. Therefore, what Ms Berry said to Ms Evans was, in effect, an admission on behalf of the respondent. Such evidence was therefore admissible as an exception to the hearsay rule: see section 81 of the Evidence Act (C'th) and the definition of "admission" as contained in the Dictionary to that Act.

I do not think that the offer of the respondent to re-employ the applicant on the terms as discussed between Mr Fearnhead and Mr Taylor on 20 December 1995 had the effect that either there was no termination of employment at the initiative of the employer or, as will be discussed later, limits the remedies open to Mr Fearnhead. Whilst there was an offer to re-employ Mr Fearnhead, from the evidence of Mr Fearnhead which I have accepted, this was conditional upon Mr Fearnhead signing a declaration acknowledging that he had received two warnings for his conduct, on that day and on the day previous.

There are a number of problems with this from the respondent's point of view. The first is that Mr Fearnhead had been given no such warnings and therefore he was being asked to sign a fictional document. Secondly, I do not think there would have been justification for Mr Fearnhead to be given such warnings. Admittedly, Mr Fearnhead did make derogatory remarks about Mr Taylor and the respondent. The respondent could expect that, if Mr Fearnhead was given his job back, that he would apologise. However, the fact that Mr Fearnhead would not apologise does not, in my opinion, justify the respondent withholding the offer of re-employment. The derogatory statements made by Mr Fearnhead were made at the end of an argument with Mr Taylor the previous day. Mr Taylor, in a sense, provoked the argument by telling Mr Fearnhead that his wages were going to be reduced to $25,000 per annum and was not being willing to discuss or negotiate on this figure. Although Mr Fearnhead may have used derogatory remarks about his employer and its manager immediately after the termination of Mr Fearnhead's employment, such comments, if made, were borne of anger, frustration and having one's employment terminated. I do not believe that the use of such derogatory remarks should be held against Mr Fearnhead. In an industrial setting, the use of derogatory remarks or what some may regard as bad language is not uncommon. Those present at the time the derogatory remarks were made were Mr Taylor, Ms Evans and Mr Stephen Berry. Mr Stephen Berry did not give evidence so I do not know what he made of them. Ms Evans presented as a strong-willed woman who would not be influenced by any derogatory remarks that Mr Fearnhead made about her employer or Mr Taylor, if she did not already accept them to have some basis.

Finally, Mr Taylor presented as a robust person who I do not think would have been unduly hurt by comments made in anger and in the heat of the moment. Indeed, Mr Taylor himself said that on 20 December 1995, he was prepared to give Mr Fearnhead a second chance. This indicates that he held no long-term illwill against Mr Fearnhead.

In all the circumstances, I do not regard the events of what transpired after the termination of employment on 19 December 1995 or on 20 December 1995 as having the effect that there was no termination at the initiative of the employer.

TERMINATION OF EMPLOYMENT IN CONTRAVENTION OF THE ACT

Section 170DE(1) of the Act states that "an employer must not terminate an employee's employment unless there is a valid reason or reasons connected with the employee's capacity or conduct, or based on the operational requirements of the undertaking, establishment or service". Section 170EDA(1) of the Act states that the employer has the onus of proving that there was such a valid reason for termination of employment.

In this case, the employer has not sought to justify the termination of Mr Fearnhead's employment, based on the operational requirements of the undertaking, establishment or service. Instead, the employer, through its advocate, sought to prove that there was, in effect, no termination of employment at the initiative of the employer.

The circumstances which led up to the termination of employment I have set out in detail above. It is sufficient to say that such circumstances do not disclose any valid reason for the termination of Mr Fearnhead's employment. The respondent was endeavouring to reduce Mr Fearnhead's wages. Mr Fearnhead objected to this. An argument developed, and Mr Fearnhead's employment was then, in effect, terminated. There was no valid reason for the termination of employment.

As section 170EE of the Act makes clear, the primary remedy for termination of employment in contravention of the Act is that of reinstatement. Section 170EE(2) states that compensation may be ordered only where reinstatement of the employee is impracticable. Further, section 170EE(1), as amended, provides that reinstatement can be ordered where the Court considers it appropriate in all the circumstances of the case.

It was submitted on behalf of the respondent that reinstatement should not be ordered in the circumstances of this case.

Evidence was given by Mr Taylor that there are currently only two Bakers Delight stores owned and operated by the respondent at which Mr Fearnhead could be employed. These stores were the Munno Para and Para Banks stores. There was also the Craigmore store, currently operated by Mr Marchant, which Bakers Delight is considering taking over because of the lack of performance of that store. However, Mr Taylor said that he thought it likely that the performance of the store would pick up such that Bakers Delight would not have to take over that store. Mr Taylor said that the positions for bakers and bakers' assistants at the Munno Para and Para Banks stores had been entirely filled and that there was no other appropriate position available for Mr Fearnhead to be re-employed with the respondent. Mr Taylor also said that both Munno Para and Para Banks stores were to be franchised by the respondent. The respondent had placed advertisements for the franchise of these stores, and Mr Taylor had interested potential franchisees. Mr Taylor also said that he thought that he could not establish a relationship again with Mr Fearnhead in the workplace. He said that he believed that what was said and happened previously and in these proceedings meant that the clock could not be turned back to a position where the respondent was confident in the work of Mr Fearnhead and his ability to get on with management and properly perform his duties.

With respect to the latter, I have said earlier that I regard Mr Taylor as a fairly robust character who will, I think, be able to recover from any illwill either expressed by Mr Fearnhead after the termination of his employment or as surfaced during the course of the proceedings. It appeared to me from viewing the evidence given by Mr Fearnhead and Mr Taylor that neither bore any particular illwill against the other and that they should be able to re-establish a working relationship. In this regard, I note Mr Taylor's insistence that he is always prepared to give somebody a second chance. The other employees at the Munno Para store, Ms Evans and Ms Brigante, gave no evidence that they would find it difficult to work with Mr Fearnhead. In addition, Mr Prideaux, although no longer employed by the respondent at the Munno Para store, said that Mr Fearnhead was easy to work with.

I have carefully considered each of the other matters raised by the respondent and do not think that any of them have the effect that I should not order reinstatement.

The meaning of "impracticable" was considered by Wilcox CJ and Keely J in their joint judgment in Liddell v Lembke (1994) 127 ALR 342. Their Honours said that "although impracticable does not mean impossible, it means more than inconvenient or difficult" (page 360).

Further, in Nicolson v Heaven and Earth Gallery Pty Ltd (1994) 1 IRCR 244, Wilcox CJ, at page 244, said that impracticable "requires and permits the Court to take into account all the circumstances of the case, relating to both the employer and employee and to evaluate the practicability of a reinstatement order in a commonsense way. If a reinstatement order is likely to impose unacceptable problems or embarrassment, or seriously affect productivity or harmony within the employer's business, it may be impracticable to order reinstatement, notwithstanding that the job remains available".

I do not regard reinstatement as impracticable in this case, and think it ought to be ordered in all the circumstances. The fact that other employees may be now engaged at the Munno Para and Para Banks stores and performing the bakery duties which would otherwise have been performed by, amongst others, the applicant, does not mean in my view that reinstatement should not be ordered. But for the unlawful termination of Mr Fearnhead's employment, it is quite likely that he would have remained the employee of the respondent. As there were no complaints about the standard of his work as a baker's assistant, it is unlikely that his employment would have been terminated for valid reason on the grounds of his capacity and conduct. Although the wage level at the Munno Para store raises an operational issue which the respondent was and is entitled to be concerned about, there has been no evidence put before me which suggests that such operational requirements mean that reinstatement should not be ordered.

If, as a result of the order for reinstatement that is made, the respondent must terminate the employment of another employee who has been employed since the termination of employment of the applicant, then this is, of course, most regrettable for the individual employee concerned. However, it remains that the applicant's employment was terminated by the unlawful act of the respondent. The fact that another person has now been employed in his place should not, in this case, prevent the Court from ordering Mr Fearnhead's reinstatement.

As Northrop J in Johns v Gunns Ltd (1995) 60 IR 258 at 271 said, "the mere fact that a position vacated as a result of the termination of an employee has been filled by the engagement of a new employee cannot make the reinstatement impracticable. A contrary conclusion would make the primary remedy ineffective. An employer could refill the position immediately, thereby depriving the terminated employee the remedy of reinstatement." This judgment was referred to approvingly by Marshall J in Abbott and Etherington v Houghton Motors (1995) 63 IR 394 at 398.

Section 170EE(1)(b)(ii) provides that if the Court makes an order for reinstatement, it can make an order requiring the employer to pay the employee the remuneration lost by the employee because of the termination. I think it appropriate to make such an order in this case. Since his termination, Mr Fearnhead has been receiving unemployment benefits with the exception of about six weeks' work. It has been held that Social Security benefits do not constitute remuneration for the purposes of section 170EE: Janicek v ICI Dulux (1995) 62 IR 37, Wilcox CJ, 4 September 1995 and Tranter v Council of the Shire of Wentworth, unreported, IRCA 573/95, Marshall J, 24 October 1995.

Mr Fearnhead said in evidence he did get about 6 weeks' casual work as a kitchen hand for the "Correctional Services Department" when a riot at a labour prison meant that prisoners lost the privilege of working as kitchen hands. He earned about $500 gross

The applicant said in his evidence that he has been actively seeking work, from the period of two weeks after his employment was terminated until the date of trial. He estimated that he had applied for some 20 to 30 positions, without success. He said that he was genuinely seeking work and this was supported by evidence from Ms Fearnhead. I accept that the applicant's attempts to seek work were genuine and he has fulfilled his requirement to attempt to mitigate loss caused by the unlawful termination of his employment. Therefore, I think he should receive in compensation the remuneration lost because of the termination.

In this case, the termination was effected on 19 December 1995. He said that he received some money from his employer, presumably in lieu of notice.

Therefore, I think that Mr Fearnhead should be compensated for the loss incurred because of the termination of his employment from 2 January 1996 to the date of reinstatement. The date of 2 January 1996 reflects Mr Fearnhead's termination pay and delay in seeking alternative employment.

I was not given any evidence or documents upon which I could precisely quantify the amount of compensation that should be ordered. Mr Fearnhead's estimate that his gross annual wages would equal $32,000 was, however, not disputed by the respondent. Such an annual wage gives a gross weekly wage of about $615. I will order that Mr Fearnhead be paid compensation at the rate of $615 per week, less PAYE contributions (see Klingenberg & TWU v IR Coates Pty Ltd, unreported, IRCA 398/95, Marshall J, 24 August 1995, page 12) from 2 January 1996 until the date when reinstatement takes effect, less also the amount of $500 for the Correctional Services Department work.

The parties will need to ascertain and agree to the appropriate net amount per week after consultation with the Australian Taxation Office if necessary. The respondent will need to remit the taxation extracted to the Australian Taxation Office. If the period between 2 January 1996 and the date when the reinstatement order takes effect involves any incomplete week, the applicant should be paid the appropriate pro rata amount. I will make an order that the amount to be paid to the applicant be so paid within 14 days.

It is declared that the termination of the employment of the applicant by the respondent contravened section 170DE of the Industrial Relations Act 1988.

The respondent shall, within 7 days, reinstate the applicant by appointing him to the position in which he was employed immediately before the termination, or appointing him to another position on terms and conditions no less favourable than those on which the applicant was employed immediately before the termination of his employment.

The employment of the applicant is deemed to have continued for all purposes from 19 December 1995 to the date of reinstatement in accordance with this order.

Within 14 days of the date of this order, the respondent pay to the applicant his loss of remuneration at the rate of $615 per week, less PAYE taxation at the appropriate rate, from 2 January 1996 to the date of reinstatement, less $500.

If the amount to be paid pursuant to order 4 cannot be agreed, there be liberty to apply on not less than 48 hours' notice to the other party.

I direct that the District Registrar cause to be delivered to Ms Kristine Berry and Mr Damian Taylor, personally, a copy of the judgment and direct their attention to the section in the judgment headed "Ms Berry's Evidence".

I certify that this and the preceding 40 pages are a true copy of the reasons for decision of Judicial Registrar Ritter as recorded in the transcript and revised by the Judicial Registrar.

Dated : 16 August 1996 APPEARANCES Representative for the Applicant: Mr G Symeonakis Palios Meegan & Nicholson Representative for the Respondent: Mr Cairney Employers Chamber Dates of Hearing : 31 July 1996 Date of Judgment : 16 August 1996