The most important expertise for the manager is observation, developing hypothesis, predicting the future and testing those hypothesis. In other words, strategic planning is the most important component of the manager. The bottom line is how to get the cash register moving not how to operate it or turning lights off and on. The manager is responsible for productivity of employees, sales and marketing, display of food, service and etc.
96 It is not clear from the evidence just how many persons were employed by the first respondent. The liquor side of the business was run by one person with occasional assistance from casuals. The amount of stock that changed hands on 1 July 1997 was valued at $148,888. That does not suggest a large store. In the document discussed above, the applicant had set out a management plan for 7 employees, though I am not able to determine whether that number took account of employees additional to the existing complement. One remark suggested that could be the case.
97 Those paragraphs also confirm the second respondent's evidence that he had taken up concerns with the applicant. They also show the value the applicant placed on those concerns.
98 The evidence of Mr Douglas as to the applicant's attitude was also borne out by the above document.
99 I note also that the tone of the whole document would confirm the second respondent's claim that, on the Sunday morning the applicant came down the stairs at the shop and had a note with him and had read from the note and said, "I wrote this last night. I don't think you are utilising my talents and things aren't going right".
100 It is clear that the second respondent did say to the applicant, in response to changes suggested by the applicant, that changes would wait until Mr and Mrs Douglas left. It is also clear that, no matter how the applicant understood it, that the second respondent was not saying that those suggested changes would be implemented at the time they left, and that, in the meantime, the applicant should simply mark time. The applicant fundamentally misunderstood the second respondent's instructions as to the approach the applicant was to adopt towards Mr and Mrs Douglas. He also fundamentally misunderstood the role that the respondents had employed him to undertake as manager of the supermarket. On the basis of the 7 July document, his approach seemed to be informed by his previous positions as a project officer with bodies such as AusAid in Papua New Guinea and CDEP (Community Development Employment Project) for various Aboriginal bodies in Australia. In those instances he was involved in setting up projects and training local people to run them. Those did not appear to involve a hands on management role in an established business with already trained staff as was the situation he faced at Bourke.
101 The second respondent said that his decision to terminate the applicant's services was not a decision that was made at a point in time, but was based on different operational problems he saw throughout the week of Mr Burks' work that basically culminated in deciding either on Friday or Saturday that he could not do the job and he was basically unfit for that particular business. The second respondent said he came to the opinion that Mr Burks really could not do what he said he could do in his resume and what he had told the second respondent. He had spoken to Mr Burks about these operational problems and said that they were not acceptable, but he did not specifically say "if you don't do this you will be dismissed, but I made it clear I didn't want them continuing, which they did".
102 The second respondent told the applicant of his decision when the applicant came into work first thing Sunday morning. There is dispute between the applicant as to what was actually said at that time. In the light of my decisions as to the fairness of the reasons to terminate the applicant's services and the unfairness of the contract I do not think it assists to take that dispute further.
103 I find that the respondents were justified in terminating the services of the applicant. That termination did not evidence any unfairness in the contract.
Probationary Period
104 The contract provided for 3 months probationary period and for notice of termination of 2 weeks at least, on either side. The applicant contended that both contractual terms were unfair in the circumstances of this case.
105 The applicant said he understood from the letter confirming his appointment that he was on a three months probationary period. It was submitted on behalf of the applicant that he paid no regard to the probationary period or the expressed notice period in the written contract in circumstances where he proposed to dedicate himself to the job and work hard.
106 The second respondent has a nineteen year history working in the hotel business and has employed many people in that time. He said that the more important the position, the more usual it was to have a three month probationary period. The three months period had been adopted on a solicitor's advice as being a fair and reasonable period within which to gauge somebody's ability. His experience was that quite often that assessment has been able to be made in a period a lot shorter than three months. He said he had a routine he followed with applicants for jobs in the hotels, that routine being to ask prospective bar attendants, for instance, to go behind the bar and show him how they operate as bar attendants.
107 Because Mr Burks' only experience in the grocery business was with his family business and his family business was situated in America the second respondent said he relied on Mr Burks' word as to his ability as a grocery manager. Zanmarl Pty Ltd did not own another supermarket to which it could send Mr Burks and observe his ability and competency on a daily basis prior to him moving to Bourke. The only place where it could observe Mr Bourke was when he started work at Bourke and watch how he performed. That was one of the reasons why the second respondent said to Mr Burks he would be on a three months trial period.
108 The usefulness of the probationary period goes beyond such practical aspects as observing how competent an applicant actually is in a position to other matters such as seeing how the employee measures up in the workplace as to interaction with other people. A probationary period offers the utility of finding out whether, for instance "paper" qualifications that may have been offered are a true indicator of the effectiveness of the employee in the actual job or that claimed experience is actually demonstrated in practice.
109 I do not accept the applicant's contention that the probationary period was unfair. It was one for the benefit of both parties. It allowed a reasonable period within which each party could assess his satisfaction either with the job itself and its conditions (the applicant) or, for the respondents, with the fitness of the applicant for the position.
Period of Notice
110 The applicant submitted that the two week notice period was particularly unfair.
111 The services of the applicant were terminated on the Sunday following his starting work on the Tuesday. The respondent paid him one week's wages and made a contribution to his removal expenses in leaving Bourke.
112 The second respondent said he said to Mr Burks that although he had not actually worked a full week, he was prepared to pay him a full week's pay and because of the fact that he had moved, made an effort to go to Bourke, he would pay him $550, to help him with his expenses in relocating himself back to where he came from.
113 He had thought that $550 was a reasonable figure because the applicant had said that all his furniture had come up on the back of a ute, so, as far as the second respondent was aware at that stage, there were not any real moving costs. In making that payment of $550, the second respondent was not covering the applicant's costs to come to Bourke. He was covering the costs for him to move from Bourke based on the above mentioned understanding as to the extent of the applicant's possessions.
114 The formal offer of employment to Mr Burks included the following paragraph: "I have secured a house for you to live in and expect that you will sign the lease agreement at your earliest convenience. The house rental payments are not included in the terms of your employment." The applicant said that that statement demonstrated that the employment would be permanent and on going.
115 The second respondent explained that when he said he had secured a house for Mr Burks, he meant that when he went to Mr Whitbread, a local real estate agent, on his own behalf, Mr Whitbread said that he had a house available and, because there were not many houses available in Bourke, the second respondent asked Mr Whitbread if he could possibly hold it until Mr Burks had a look at it. The second respondent expected the applicant to sign a lease agreement as just being a normal course of proceedings, but did not expect him to sign one for any particular period. The lease was the applicant's responsibility. The second respondent knew the applicant had a family by his resume and had indicated that he was at some stage going to bring them to Bourke to live.
116 The period of notice has to be examined in the light of the employment relationship as it unfolded. The longer the relationship subsisted, the more likely that circumstances could (not necessarily would) arise that would render that term of the contract unfair eg promotion over ten years to a position with maximum management responsibility.
117 In this case it was not the length of time within which a person might feel comfortable taking on the full duties of the manager as had been submitted on behalf of the applicant that would give rise to consideration of the adequacy of the notice period. What was important was the wide gap between what the respondents wanted the manager to do and what the applicant thought were the appropriate duties and approach, and that gap became evident at a very early stage in the relationship.
118 The letter of appointment did not provide for pay in lieu of notice. The applicant's summons for relief pursuant to s 106 did not explicitly seek an order for pay in lieu of the twelve months notice sought, though the amount was particularised in the money claims. It was not a claim that would catch the respondents by surprise.
119 The contract of employment provided for two weeks notice. In my view, in the light of a termination within the probationary period, that was not prima facie unfair.
120 The second respondent said that the only discussion he had with the applicant about the timing of his departure was that he said to Mr Burks that he was quite welcome to work the two weeks if he wanted to but other than that, no. That offer was first mentioned in oral evidence. The applicant says that offer was not made. In any event, the evidence as to the different expectations each of the parties had as to the job, and how those expectations had been translated into action in the preceding days, shows how impractical such an arrangement would have been.
121 Contrary to the respondents' argument, it was not reasonable that the applicant not be paid two weeks pay in lieu of notice just because he had only worked for four days. The letter of appointment provided for at least 2 weeks notice during the three month trial period. His services were terminated within that three months. Because the situation was such that it was not a real option to work out the notice, fairness required that he should have received two weeks pay, but that was not provided for in his contract of employment.
122 I find that that lack of a provision for payment in lieu of notice caused the contract of employment as set out in the letter dated 15 June 1997 to be unfair in terms of s 105(a).
123 That finding having been made it is necessary to determine whether orders should be made pursuant to s 106.
Alleged Misrepresentations by Applicant
124 In resisting the making of orders in favour of the applicant, the second respondent relied particularly on what he regarded had been misrepresentations by the applicant in his resume as to his previous experience in the management of a supermarket. He pointed to the differences between the resume attached to the applicant's affidavit in these proceedings and that forwarded to him at the time of the applicant's application for the job of supermarket manager, in that the employment history between 1972 and 1983 had not been advised to him. The respondent characterised the fact that the applicant presented a CV to the Court, different from the one supplied to the respondent with his application, as lies and misstatements etc. On that point, the respondents are relying upon later acquired information to justify the termination.
125 However, the main complaint of the respondents as to the alleged misrepresentations is that they say that the applicant from the beginning of the relationship had put himself forward as having skills in supermarket management that he did not in fact possess.
126 Mr Winn put it to the applicant that he had employed him on the basis of the letter of introduction, the resume and the facts given by the applicant orally. The applicant said the facts were in his resume and the letter of introduction.
127 It is natural for an applicant to tailor a CV to highlight those aspects of it that will, the applicant hopes, most influence the employer to react favourably to his application. There is nothing wrong with that as long as fraud or editing to an unsustainable degree is not indulged in. In this case the applicant did burnish to a greater gloss one aspect of his background, namely that of his involvement in his family's supermarket in California, especially as to the nature and extent of that involvement.
128 In the circumstances I accept that the explanation given by the applicant for the differences in the resumes complained of by the second respondent was reasonable:
3. I refer to paragraph 4 of the second respondent's affidavit
and say that I did not place much weight on the experience I had gained in my family's business and did not generally include it in the resume I used for employment applications. I regard my tertiary level qualifications and post graduate studies in conjunction with the various employment I have undertaken over the years, to be of more significance than my involvement with my father's meat market and grocery business ("the family business"). However as the subject business was similar in nature to my family's business I decided to include it.
129 I do not need to make specific findings as to credit. The perceptions of the parties as to events and as to the requirements of the position were obviously different, even if sincerely held. I am able to make findings in the light of the overall evidence.
Redundancy
130 The applicant's claim that his termination was one in the nature of a redundancy arising out of a restructure of the manager's position was based on his assertion that the applicant was replaced by a trainee manager at a lesser salary, that person being the niece of Mr and Mrs Douglas.
131 The second respondent did not agree that he had restructured the management position. Early in the week following the applicant's termination he had tried to obtain another manager. He asked for suggestions from Mr and Mrs Douglas.
132 He was keen to find somebody who had the qualifications to do the job. Bourke is a town which is some 800 kilometres from a major centre and it is very difficult to get employees of a managerial calibre to go there. There was a need at that time to do something because of the second respondent's inexperience in the supermarket business. He had to have somebody there who could operate the main part of the supermarket on a day-to-day basis, because he knew he did not have the necessary skills at that time.
133 He approached Mrs Boch and another person who now works in the supermarket up the road from this particular business. Ms Boch had been an assistant manager for eight years at the Bourke Payless supermarket, prior to it being burned down. (It is clear from the evidence that Ms Boch was neither the niece of Mr and Mrs Douglas nor was she employed as a trainee manager, as was claimed by the applicant.)
134 He employed Ms Boch some weeks later as supermarket manager, but with less authority than the applicant was going to have. That was because she only wanted to work Monday to Friday between 8 am and 4 pm. That was at a time when the business operated seven days a week and was open between 7.30 am and 8 pm. The second respondent had expected the applicant to work five days a week, one of those days being at the weekend, while the shop was open and to have more control over a lot more of the ordering. The duties of the applicant and of Ms Boch insofar as being out the front doing the day to day business of the supermarket were similar. Because of the hours she was willing to work, the second respondent had to be present at the business more than if Mr Burks had been there.
135 She was paid less than the applicant. Her agreed rate of pay for the hours and days she worked was $600 per week. That rate later went down to $550 per week when the second respondent employed a husband and wife team who did some managerial work, so that Ms Boch's responsibility was diminished. Ms Boch left in March 1998.
136 Mr and Mrs Douglas had basically operated the supermarket and the liquor store as one business. At the time the second respondent gave evidence, the supermarket was being fully operated by someone who paid the first respondent rent. A contract to sell it had not been concluded. The first respondent still operated the liquor store business, with a manager to look after it on a day to day basis.
137 The applicant's submissions as to redundancy because of restructure of the business were not made out. To the extent there was any restructure of the management, that restructure was the outcome of the applicant's departure, not the cause of it. The fact that the new supermarket manager, Ms Boch was paid less than the applicant was primarily because of the different hours worked by her with resulting different responsibilities. It was not until a year later that Mr Stinton was employed.
Is Second Respondent a proper Respondent to the Application?
138 The second respondent disputes that he is a proper respondent to this application and that orders should not be made against him.
139 Zanmarl Pty Ltd is a company that commenced operation about May 1997. The one shareholder identified in the ASIC's historical company search is Truemist Pty Ltd as trustee for the Winn Family Trust Number 1. Zanmarl was purchased as a vehicle to purchase the business of the Welcome Mart Supermarket in Dubbo from Mr and Mrs Stanley Douglas who retained ownership of the real estate. Mrs Maureen Winn, mother of the second respondent, was director and secretary of Zanmarl until 15 September 1997. Russell Brian Winn was appointed a director on 15 September 1997. He remains the sole director of the first respondent and is the company secretary.
140 Russell Winn had been engaged in the negotiations to purchase the supermarket from Mr and Mrs Douglas. He then ran the supermarket business on a day to day basis and made any necessary decisions as to it.
141 It was Russell Winn who was responsible for all the steps from advertising the position onwards that led to the engagement, and later termination, of the applicant.
142 The cheque for $1,191.25 dated 7 July 1997 given to the applicant on termination was drawn on the account of Zanmarl Pty Limited, trading as Welcome Mart Supermarket.
143 I find that the newspaper report relied upon by the applicant as to the second respondent's status as "owner" of the supermarket has no probative value.
144 The issue as to persons, not parties to a contract, who could have orders for payment of money made against them was dealt with definitively by Barwick CJ in Brown v Rezitis [(1970) 127 CLR 157 at 164ff] where he said:
But underlying sub-s (2) is I think a broad concept of a restitution of the parties to a situation which existed before the making of the contractual arrangement as well as in an appropriate case to make remedial provision for what has taken place or been done under the contract in the meantime. This, it seems to me, cannot of necessity and in all cases and with relation to an arrangement varied or avoided on each of the grounds in sub-s (1) be confined to an order for payment of money by one of the parties. In some cases, as I have said, there will be persons who are not the parties to the contract but who have in fact participated in its making and there may be persons who have received money indirectly from one of the parties to the contract or who may be holding money derived therefrom for one of the parties. Consequently, I am of opinion that the power to order the payment of money is not limited to the making of an order for the payment of money by one of the parties to the contract or arrangement varied or avoided.
145 A different aspect of the situation is described in Beahan v Bush Boake Allen Australia Limited [(1999) 93 IR at 35]:
What emerges from the above authorities, we think, is the now settled view that s 106 (as with the previous s 88F of the 1940 Act and s 275 of the 1991 Act) is directed to an impugned contract of employment, whether existing or terminated, as to the fairness of its express or implied terms. Such unfairness will depend upon the facts of each particular case by focusing attention on the contractual relationship between a particular employer and employee and where the unfairness may arise from the terms of the contract itself, the surrounding circumstances and/or the manner of performance or operation of the contract. The section, we emphasise, is not concerned with re-establishing an employment relationship which has ended nor with compensating an employee for the loss of his employment contract. In other words, the section is properly concerned with the fairness of the terms of a contract of employment in its various respects and, if relevantly found to be unfair, to provide remedial relief by avoiding or varying the terms of that contract and to order the payment of money in connection with any contract so avoided or varied as is considered just in the circumstances of the case.
146 I find that on the evidence Russell Brian Winn is a proper respondent to this application and, in the light of my decision, it is proper he be included in the orders the Court makes pursuant to s 106(5) in providing remedial relief to the applicant.
Incapacity to Pay
147 Zanmarl has one ordinary share issue to the value of one dollar. The one shareholder is identified in the ASIC company search as being Truemist Pty Ltd, as trustee for the Winn Family Trust (No 1).
148 At about the time Zanmarl took over there were two supermarkets, including that run by Mr and Mrs Douglas, each of which had increased its business after the Payless store burned down 18 months earlier.
149 Mr Winn said that the respondent could not afford to pay the amount claimed. The business will have difficulty meeting the legal costs of defending the claims as it is.
150 The business is generally successful in returning a profit the way that it is structured now.
151 The liquor side of the business earns money. Zanmarl still operates the liquor store business, employing a manager who runs it on a day to day basis, holiday relief being provided by the second respondent.
152 The supermarket was not doing so well for Zanmarl. The supermarket business was in May 2000 being fully operated by someone else who pays Zanmarl rent. Attempts by Zanmarl to sell it had been unsuccessful.
153 Asked whether Zanmarl Pty Limited could meet a debt of, say, $50,000, the second respondent said that Zanmarl Pty Limited has a fixed and floating charge facility which basically has first right over all the assets in that particular company. That charge at this date is $105,000. The fixed and floating charge for $105,000 was a loan to pay out the remainder to Mr and Mrs Douglas. At the present time in Bourke itself two new fairly large supermarkets are being built. The competition that Zanmarl has has increased probably 50 per cent the supermarket area. So, the prospects for grocery sales in Bourke are fairly dismal which would mean that basically the value of the grocery business will be negligible. Bourke has a population of around 2,800, 2,900 with a service area of around 4,000 people. Cobar which is 130 kilometres south of Bourke has a population of around 6,500 and when it had a fairly strong mining sector and there was a fair bit of wealth in the town, it only had two supermarkets. The second respondent could only speculate how Bourke is going to survive with four supermarkets.
154 The respondents did not produce any accountancy evidence to support their claims of incapacity to make payments ordered by the Court. I have nothing before me that enables me to conclude that the respondents cannot satisfy the monetary orders I propose to make.
155 The claim of incapacity to pay is rejected.
Conclusions
156 Sections of the 1996 Act relevant to the determination of this application are set out below:
105 Definitions