Farr v Narellan & District Real Estate Pty Limited and Anor

CATCHWORDS: Unfair Contract - real estate industry - contract terminated summarily for misconduct - no grounds for summary dismissal established - fairness of respondents' investigation process - no proper investigation - contract found unfair - fairness of notice provisions of contract considered - notice provisions found unfair - commission earnings on termination of contract - contract varied - money orders - interest

LEGISLATION CITED: Industrial Relations Act 1996

Anthony Balsdon v Murray Irrigation [2003] NSWIRComm 251 Bell & Berg v Macquarie Bank Ltd [2002] NSWIRComm 235 Bell & Berg v Macquarie Bank Ltd [2003] NSWIRComm 363 Gordon Meggatt v Australian Business Limited [2007] NSWIRComm 182 CASES CITED: Newton v Goodman Fielder Mills Ltd (1997) 81 IR 227 Steinhardt v Sapphire Bioscience Pty Ltd [2004] NSWIRComm 42 Sydney Water Corporation & Anor v Industrial Relations Commission of NSW & Anor [2004] 6 NSWLR 661 Wang v Crestell Industries Pty Limited (1997) 73 IR 454 Westfield Holdings v Adams (2002) 114 IR 241 Westfield Ltd v Helprin (1998) 82 IR 411

HEARING DATES: 19 March 2007, 20 March 2007, 21 March 2007, 23 May 2007, 13 August 2007

APPLICANT: Mr C Magee of counsel SOLICITORS: Galluzzo Golotta Andriano LEGAL REPRESENTATIVES: RESPONDENT: Mr B Cross of counsel SOLICITORS: Marsdens Law Group

JOSEPH KELLY FARR v NARELLAN & DISTRICT REAL ESTATE PTY LIMITED & ANOR Application under s.106 of the Industrial Relations Act 1996 JUDGMENT

1 These proceedings concern a contract of employment under which the applicant, Joseph Kelly Farr, was employed as a real estate salesman by the first respondent, Narellan & District Real Estate Pty Ltd, trading as The Professionals. The contract was terminated summarily for misconduct on 5 March 2003. Mr Farr complained that the respondents had no proper basis for so terminating the contract and that the contract was unfair, in a variety of respects, including in relation to its termination provisions and commission arrangements. The respondents denied each of those claims. 2 On the first day of the hearing, the applicant sought leave to proceed on a further amended summons. The respondents objected to the amendments sought. Not all of the amendments were finally pressed and leave to amend was granted. After the close of the applicant's case, leave was sought to amend the respondents' reply, by reference to s 109A of the Industrial Relations Act 1996 ('the Act'). The hearing was adjourned to enable the applicant to consider his position, with the result that while leave to amend the reply was opposed, the leave was granted. 3 The orders sought in the further amended summons were:

(1) An order declaring void in whole or in part, either from its commencement or from some other time, the contracts, arrangements, conditions or collateral agreements between the Applicant and the First Respondent whereby the Applicant performed work in an industry except to the extent that the Applicant received remuneration and benefits from the First Respondent or became entitled to receive such remuneration or benefits.

(2) A declaration that the contract between the Applicant and the First Respondent, whereby the Applicant was employed as a full time Salesperson of the First Respondent ("the Contract") was unfair, harsh or unconscionable, or contrary to the public interest.

(3) A declaration that clauses 7.2 and 7.3 of the Contract are void ab initio insofar as they provide for the giving or payment of insufficient notice of termination on the termination of the Applicant's employment.

(4) A declaration that the Contract is void ab initio insofar as it did not provide for payment on the termination of the Applicant's employment for reason of redundancy.

(5) An order varying the terms of the Contract prior to its commencement, or from its commencement or some other time in order to provide the following terms: a. The First Respondent shall not terminate the Contract in circumstances that are harsh, unjust or unreasonable;

b. That the employment of the Applicant may not be terminated summarily upon the basis of facts and circumstances found to be erroneous;

c. If First Respondent, and its officers including the Second Respondent have concerns about the Applicant's conduct (including alleged misconduct) or performance at work ("Performance Concerns") the Respondents will, prior to taking any steps that are, or have the potential, to detrimentally affect the Applicant's on-going employment with the First Respondents provide to the Applicant: (i) full written particulars setting out the Performance Concerns;

(ii) a period of no less than 2 weeks to respond to the written particulars of the Performance Concerns;

(iii) an opportunity to make oral representations to the Respondents in relation to the Performance Concerns; and a reasonable period in which to address the Performance Concerns.

d. That the employment of the Applicant may not be terminated by the First Respondent, other than for grounds sufficient to constitute summary dismissal of the Applicant, unless and until the First Respondent has made all reasonable inquiries regarding the alleged conduct which the First Respondent reasonably believes would constitute grounds for dismissal;

e. That, in the event the Contract is terminated pursuant to paragraph (d), the Contract may only be terminated upon the First Respondent providing to the Applicant notice of any allegations made against him or notice of any conduct of the Applicant which, in the opinion of the First Respondent, such opinion being reasonably held, was below the level of conduct and/or performance that could reasonably be expected of an employee in the circumstances of the Applicant;

f. That the Contract may only be terminated in accordance with the term in paragraphs (c) and (d) upon the expiry of fourteen (14) days from the time that first notice of any allegations and/or complaints regarding the Applicant's performance are brought to the attention of the Applicant and the Applicant has not in the opinion of the First Respondent, such opinion being reasonably held, within that fourteen (14) day period, altered his conduct to remedy the deficiency in his performance of the Contract;

g. The First Respondent shall give to the Applicant 6 months notice of termination of the contract or a payment of 6 months in lieu of notice based on the Applicant's total remuneration package under the arrangement including superannuation, any Commissions, bonuses or incentives paid or payable.

h. The Respondent shall not terminate the contract without providing sufficient notice or payment in lieu of notice. i. In circumstances where the First Respondent fails to provide the notice required in paragraph (g), or fails to allow the Applicant to work out the notice period, the Applicant shall be entitled to a payment in lieu of notice based upon the following components: i. Six months base salary - based upon the rate of $953.85 per week;

ii. Six month motor vehicle allowance - based upon the rate of $10,400 per annum

iii. Six months commission calculated by reference to the average monthly commission earned by the Applicant in the six months prior to the date of termination;

iv. Six months Superannuation; l. In the event that the Applicant's employment is terminated by the First Respondent, the First Respondent shall pay to the Applicant all Commissions in respect to completed transactions for which the Applicant was the appointed sales person and in respect to which the exchange or settlement of the transaction had been effected prior to the date or termination;

m. The payment of such Commissions shall occur whether or not the commission in respect to the completed transaction had been received by the First Respondent either prior to or after the date of termination of the contract;

n. The payment of such Commissions shall be made by the First Respondent, whether or not at the time of the termination of the Applicant's employment, the First Respondent had received payment of Commission in respect to the transaction;

o. For Commissions where the First Respondent has received payment in respect of a completed transaction prior to the termination of the Applicant's employment, the First Respondent shall pay the Commission due to the Applicant on termination of the contract;

p. For Commissions where the First Respondent has not received payment in respect of a completed transaction prior to the termination of the Applicant's employment, the First Respondent shall pay the Commission due to the Applicant on receipt by it of the Commission in respect to the completed transaction;

q. Upon termination for any reason the First Respondent shall pay to the Applicant all accrued but unpaid salary and superannuation entitlements.

r. Should the Applicant's employment be terminated due to the economic situation of the First Respondent, the First Respondent shall pay reasonable compensation in the amount of six (6) months payment of the Applicant's total salary package including his base salary, payment of commission and superannuation.

s. The method of determining the amount of commission to be paid in accordance with paragraph (h) shall be an amount equivalent to the previous six (6) month period from the date of termination of payments of commission made to the Applicant by the First Respondent.

An order that, in addition to the amounts set out in paragraph 5, each or any of the First Respondent and/or the Second Respondent pay to the Applicant amounts which would have been payable by the First Respondent to the Applicant under the provisions of the Annual Holidays Act and for annual leave loading as if the Applicant had remained in the employment of the First Respondent until the expiry of the termination period.

A declaration that the Second Respondent benefited from the said contract, arrangement, conditions or collateral arrangements.

An order that the Second Respondent was culpably associated with the unfairness of the said contracts, arrangements, conditions or collateral arrangements

An order that the Second Respondent are party to and to any unfairness, harshness or unconscionability under the Contract, as well as being party to Contract as varied or voided.

An order the First Respondent and the Second Respondent are jointly and severally liable for any order as to the payment of money in connection with the Contract, and the Contract as varied or voided.

An order that each or any of the First Respondent and/or the Second Respondent pay to the Applicant such amount of money in connection with the Contract so avoided of varied as may appear to be just in the circumstances.

An order that each or any of the First Respondent and/or the Second Respondent pay to the Applicant interest upon such amount of money as is ordered to be paid to the Applicant in connection with the Contract.

An order that each or any of the First Respondent and/or the Second Respondent pay the Applicant's costs of and incidental to these proceedings.

Such further orders to this Court as seem fit. 4 The money orders sought were:

NOTICE 6 MONTHS NOTICE Base Salary - $953.85 x 26 weeks $24,800.10 Superannuation - 9% $ 2,232.00 Car allowance - ($10,400 p.a) $ 5,200.00 6 months average monthly Commissions $49,431.61 (Sept 02 - Feb 03 -$8,238.60 per month) TOTAL $81,663.61 COMMISSION PAYMENTS January 2003 $9883.36 February 2003 $6850.54 TOTAL $16,733.90 ENTITLEMENTS Salary and Wages due to 5 March 2003 $953.85 Superannuation $85.84 Motor Vehicle allowance $ 200.00 Accrued leave $1,365.10 TOTAL $ 2,604.79 TOTAL $101,002.30 5 The issues which the applicant submitted required the Court's determination in the proceedings, appear as annexure A. The respondents did not demur from that list, although all of the issues raised were not finally pressed. 6 Evidence was called from the applicant and from Troy Nicholson, Director of Troy Nicholson Real Estate and Brown Nicholson Real Estate; Mark Richardson, real estate agent, Starr Partners; Shannon Daniels, LJ Hooker, Campbelltown; Michael Everard, the second respondent and director of the first respondent; Robert Williams, manager; John Mainwaring, mortgage broker. Various documents were also tendered. After the hearing was adjourned for submissions, the parties agreed that their evidentiary case should be reopened. The respondents then led further evidence from Mr Everard and from Mr John Drinnan, co-owner and manager of company that owns 8-10 Somerset Avenue. The applicant called evidence in reply from Ms Pamela Whelan, NSW Area Manager with Century 21 Australia; Ms Lyndal Bolton, Property Manager with Troy Nicholson Real Estate trading as Starr Partners and from Mr Nicholson. 7 The evidence was that Mr Farr was employed by The Professionals in July 2001, having first met Mr Everard, a director and principal of The Professionals, when he had listed a house for sale. Mr Farr was then employed as a new car salesman at a Lexus dealership in Parramatta. In April 2001, he was offered a sales position at The Professionals, in a meeting attended by Mr Everard, Mr Barry Dickinson, another principal of The Professionals and Mr Tony Iskra, an employee of The Professionals. A written offer was made on 18 June and Mr Farr commenced his new employment on 1 July. There were issues between the parties as to what was said in their discussions, prior to Mr Farr's acceptance of the offer. 8 Mr Farr's evidence was that his employment was terminated on 5 March 2003, when he and another salesman, Shannon Daniels, were called into a conference room by Mr Everard. Mr Everard gave each of them an opportunity to resign or to be dismissed, for associating with Tony Iskra. While Mr Farr and Mr Daniels both sought an explanation for what Mr Everard meant, he refused to give one. Both Mr Farr and Mr Daniels refused to resign and were summarily dismissed, although Mr Daniels later agreed to resign. On their evidence, neither Mr Farr nor Mr Daniels were paid what was outstanding to them on termination. Mr Farr's evidence was that he understood that The Professionals had later closed various of its offices and Mr Farr claimed in these proceedings that in truth, he had been dismissed for reasons of redundancy. This was a claim not finally pressed in the proceedings. 9 On Mr Farr's evidence, the termination meeting lasted about 30 minutes. His affidavit evidence as to what transpired was:

Mr Everhard(sic): "I told you not to hang around Tony Iskra and this is the result - you lie down with dogs, you will get fleas. Here are two letters. You can choose to resign or you can be fired. It's your choice".

Mr Everhard(sic) then handed me two letters. Copies of the letters handed to me by Mr Everhard on the occasion appear at "JKF: 20 to JKF: 22. I then read each of the letters and then conversation continued in words to the effect:

Mr Everhard(sic): "You know what this is all about."

Mr Everhard(sic): "You know why. I told you not to hang around Tony Iskra."

I kept asking Mr Everard what I had done but he refused to answer.

I refused to resign and my employment was then terminated.

The Respondent offered to pay me the termination payment of $2,534.00 but I refused to accept the payment.

Mr Everhard(sic): "You told Barry Dickenson on Friday you thought Rob Williams was trying to get rid of you. You wish for something long enough you will get it."

Mr Everhard(sic): "You can quit and get a nice reference letter or you can pack you things now. I have to go to a meeting. Louise can sought out your final pay."

10 Mr Daniel's evidence was that the meeting lasted under 10 minutes. His affidavit evidence as to what was said was:

Mr Everhard(sic): "You're always asking me whether or not your job is safe. If you worry about something so much it'll turn up. The day has turned up."

Mr Everhard(sic): "Yes, you should pack up your gear and get out of here straight away. Leave your diaries and clean up your desks. I'll you an option. You either terminate the agreement and give me notice or I will sack you immediately for breach of confidentiality."

Mr Farr: "I will give you $1,000.00 right here and now if you can show me how I have breached confidentiality."

Mr Everhard(sic): "You were saying to Rob Williams how much Combined were doing last month and you're always talking about our business to Tony Iskra. You guys know how I feel about Tony. If you hang around with dogs long enough you will get flees(sic). I've told you time and time again I don't want you mixing with Tony. I told you guys I have goals this year and I am not going to make any light decisions or let anyone get in the way of me achieving my goals."

Mr Farr: "But we haven't don't anything. We have never revealed our figures to Tony. You're making the wrong decision I can see that your angry buy why don't you go home and sleep on it and cool down."

Mr Farr: "You're going to wake up tomorrow morning and realize you're done something silly through anger."

Mr Everhard(sic): "You have two options. Resign or I'll fire you."

Me: "You know I love it here. The only way you will get me out of here is by sacking me because I don't want to leave."

11 In cross examination, they each agreed that other things were said at this meeting, including that they were told by Mr Everard that the reasons for their dismissal was breach of their obligations as to confidentiality. 12 Mr Farr's employment contract dealt expressly with the question of confidential information, under the heading 'Duty of Confidentiality':

8.1 The Employee shall at all times treat as and keep confidential all information that is the property of the Employer that has not lawfully entered the public domain, which includes but is not limited to the names and other information contained within the Employer's Database (as defined in clause 8.3), which the Employee may become aware of during the course of his/her employment;

8.2 The Employee shall not use or divulge any of the information referred to in clause 8.1 either during the period of employment or after employment ceases, other than:

(a) in the ordinary course of his/her employment; (b) with the Employers prior written consent; (c) for the purpose of obtaining legal advice as to confidentiality; or (d) by compulsion of law.

8.3 In this clause 'Database' includes but is not limited to:

(a) names, addresses and phone numbers of sellers, buyers and prospective sellers and buyers or the names of addresses and phone numbers of any property owner on whose behalf a property is managed by the Employer; (b) financial information; (c) budgets; and (d) Employer's contract information

13 Mr Everard gave evidence of the competitive environment in which The Professionals was operating and why it was necessary for it to protect its business, by the confidentiality provisions contained in its sales staffs' employment agreements. All of the witnesses corroborated that evidence. 14 On Mr Everard's evidence, he learned from The Professionals' manager, Mr Robert Williams, that he had received a complaint from a Mr John Mainwaring. Mr Mainwaring had received a letter from Starr Partners, another real estate agency, alleging that he was in breach of an agreement with them, because he was going to lease premises to set up a real estate business. Mr Mainwaring had worked at Starr Partners. He had approached Mr Farr, about leasing premises to set up his own agency. Mr Mainwaring complained to Mr Williams that he had paid The Professionals a deposit for the premises and only Mr Farr had been aware of his intentions. 15 It was Mr Williams' advice as to the receipt of Mr Mainwaring's complaint, which led Mr Everard to decide to terminate the employment of both Mr Farr and Mr Daniels, although what Mr Daniels had to do with this complaint was not apparent. On his own evidence, Mr Everard told Mr Farr and Mr Daniels when he met them:

12. I said to them both words to the effect "I've told you before, that it is not a good idea to socialise with people like Tony Iskra, and to talk about confidential business with them. You've chosen not to comply with that and you have got 2 options. You can resign and keep a clean employment record, and if anyone rings me about a job I will say that you were good sales people, otherwise you will be terminated. As I said this, I gave Joe two (2) letters, one giving effect to a resignation, a copy of which is annexed hereto and marked with the letter "C", and the other giving effect to a termination, a copy of which is annexed hereto and marked with the letter "D". I gave similar letters to Shannon Daniels. Both Joe and Shannon Daniels said to me words to the effect "I don't understand why you are doing this".

13. I replied with words to the effect "I've told you, you have breached confidentiality and you can resign and there will be no hard feelings or you will be terminated. Louise will fix up your pay".

14. Shortly after this conversation, I left the office as I was running late to attend a meeting. I estimate that my meeting with Joe and Shannon Daniels lasted no more than 10 minutes. 16 Mr Everard provided Mr Farr and Mr Daniels with two letters. The first provided for a resignation, in which event they were to be paid two weeks' pay. The second was a summary dismissal effective immediately, with payment up to the date of termination only. 17 Mr Iskra had previously been employed by The Professionals. At the time of these events, he was employed elsewhere. Mr Everard suspected Mr Farr of leaking confidential information to Mr Iskra. Mr Iskra was not called by either the applicant or the respondents, even though, when Mr Everard was recalled to give evidence in August 2007, Mr Iskra was then again in the employ of The Professionals. 18 Mr Williams' evidence confirmed that he had received a complaint from Mr Mainwaring, which he referred to Mr Everard. Mr Williams' was employed as The Professionals' manager. His evidence was that earlier in February, at two separate staff meetings, he had spoken to staff about the need for confidentiality to be maintained. Mr Farr confirmed this evidence. Mr Daniels denied it, although conceding that his memory could have been affected by the lapse in time since these events. 19 Mr Mainwaring's evidence was that he had been dealing with Mr Farr; that he had stressed the need for confidentiality with Mr Farr and that he made a complaint about Mr Farr to Mr Williams, after he received correspondence from Starr Partners about the proposed lease. Mr Mainwaring ceased dealing with Mr Farr, after receiving correspondence from Starr Partners' solicitors. Despite this, some time later, he was again approached by Mr Farr about leasing property, after Mr Farr had commenced employment with Starr Partners. Mr Farr denied that this approach involved a breach of his obligations to The Professionals. On his evidence, he obtained Mr Mainwaring's contact details from the Starr Partners' database. Mr Nicholson confirmed that this information was held in that database. 20 On Mr Mainwaring's evidence, while employed by Starr Partners, another employee, Mark Richardson had said on more than one occasion, words to the following effect:

"The Professionals did (he would then state a number of properties sold) with a value of (he would then state a value of those properties in dollar terms). That comes from Joe Farr".

21 Mr Richardson was called to give evidence and denied ever having made such statements. Mr Farr denied having provided such confidential information about The Professionals' business performance to Mr Richardson. Mr Nicholson also denied such statements having been made by Mr Richardson. 22 After the termination of his employment, Mr Farr took a job with Starr Partners. It was Mr Richardson who advised Mr Nicholson of Mr Farr's dismissal by The Professionals and that he might be interested in employment with Starr Partners. 23 In his evidence, Mr Nicholson explained that he had met Mr Farr some three years previously, when taking a listing of his house, at a time when Mr Farr had not been employed in the industry and in circumstances where, on his evidence, he had never spoken to him again, prior to 8 March 2003, the date of his dismissal by The Professionals. Mr Nicholson also explained that he came to offer Mr Farr a job, after Mr Richardson told him of Mr Farr's dismissal. The parties' respective cases

24 The case advanced for the applicant was that he had been headhunted away from secure employment at a Lexus dealership, on the basis of representations that he would earn an income equivalent to, or in excess of, what he had been earning and that he would be guaranteed, long term, secure employment with The Professionals. 25 This had induced him to take up that employment, but those representations were not made good. During the course of the employment, the respondents introduced commission arrangements which significantly departed from earlier arrangements and in March 2003, Mr Farr was wrongly summarily dismissed for misconduct. 26 The evidence had demonstrated the unfair approach adopted by the respondents, before summarily terminating the applicant's employment. The contract contained no terms governing the way in which the respondents had pursued this termination. The contract had been demonstrated to be unfair, in permitting the respondents to conduct themselves as they had, essentially without any investigation at all, into the allegations of misconduct, which had led to the termination. 27 It was submitted that the evidence showed that there was no basis, in fact, for the termination and that the procedures pursued in dealing with the allegations of misconduct, were entirely unfair. 28 At trial, in addition to Mr Mainwaring's complaint, some three years after the termination, the respondents had sought to rely on new allegations of breach of confidentiality, to support the dismissal. On the respondents' own evidence, those matters had not featured in the dismissal at the time. 29 The respondents' conduct had resulted in the representations made to induce the applicant to take up the employment, not being made good. The result of the respondents' conduct was to deprive the applicant of the long term, secure employment he had been promised. 30 In the circumstances, it followed that the notice provisions of the contract had been demonstrated to have been unfair. Not only had the applicant received no notice of his termination, if the contractual two week notice period had been applied, his notice would have been entirely inadequate and unfair, depriving him of the opportunity to earn substantial commissions, in circumstances where he had invested significant time and effort in developing potential listings. On the evidence, there was a three to six month time lag in a salesperson in this industry, starting to earn commissions at significant levels. 31 The fact that the notice period accorded with the minimum terms of the applicable award, did not address the unfairness of this contract, revealed on the evidence. (See Newton v Goodman Fielder Mills Ltd (1997) 81 IR 227 at 232.) It was also submitted that s 109A of the Act, did not preclude this claim, given the variations to the contract sought. 32 It was argued that fair terms as to notice would have been a sufficiently long period, to have permitted the applicant to earn commissions from listings and sales in his new employment. Six months' notice was pressed, even though this employment had been on foot for only 20 months. The representations made to the applicant, to headhunt him from his former employment and the unfair procedures followed on termination, were submitted to support such a substantial notice period. 33 The money orders just in the circumstances, were submitted to be calculated by reference to Mr Farr's earnings in the 12 months preceding the termination of his employment, including commission. As to commission, it was argued that the contract should be varied to insert a term:

(a) In the event that the Applicant's employment is terminated by the First Respondent, the First Respondent shall pay to the Applicant all Commissions in respect to completed transactions for which the Applicant was the appointed sales person and in respect to which the exchange or settlement of the transaction had been effected prior to the date or termination;

(b) The payment of such Commissions shall occur whether or not the commission in respect to the completed transaction had been received by the first Respondent either prior to or after the date of termination of the contract;

(c) The payment of such Commissions shall be made by the First Respondent, whether or not at the time of the termination of the Applicant's employment, the First Respondent had received payment of Commission in respect to the transaction;

(d) For Commissions where the First Respondent has received payment in respect of a completed transaction prior to the termination of the Applicant's employment, the First Respondent shall pay the Commission due to the Applicant on termination of the contract;

(e) For Commissions where the First Respondent has not received payment in respect of a completed transaction prior to the termination of the Applicant's employment, the First Respondent shall pay the Commission due to the Applicant on receipt by it of the Commission in respect to the completed transaction; 34 As to mitigation, it was argued that in his new employment, the applicant's average salary and commissions had more than halved. There would, however, be no simple deduction made, from the money order awarded given all of the circumstances. The respondents should not benefit from the fortuitous circumstances that the applicant had suitably gained other employment. 35 The respondents' case was that issues of credit were raised in the proceedings, which would be resolved against the applicant. Particular account would be taken of Mr Nicholson's evidence, which showed that he was a witness whose evidence would be difficult to accept. 36 The evidence showed that there were three forms of disclosure of confidential information relied upon in terminating the applicant's employment. Disclosures made to Mr Iskra, who had not been called by the applicant; disclosures of the respondents' sales figures to Starr Partners, as was Mr Mainwaring's evidence; and disclosure of Mr Mainwaring's dealings to Starr Partners. It was submitted that the applicant's evidence about these matters was not reliable, nor was that of Mr Nicholson and that it would not be accepted. 37 While it was accepted that there had been deficiencies in the respondents' procedures on termination, it was argued that the evidence showed that no different outcome would have resulted, had the elaborate procedures sought by the applicant in the summons, been followed. Nor would it be overlooked that the compulsory processes available in court proceedings like this, would not then have been available to the respondents. 38 In any event, even if summary dismissal had not been available, the evidence showed that the contractual termination clause was consistent with industry practice. It was standard in this industry for short periods of notice to be agreed. Even on the applicant's own evidence, it was easy to find other employment in this industry and he agreed to similar notice in his new employment. It followed that the claim for six months' notice as fair in the circumstances, had not been made out. 39 Nor would the alleged representations be accepted, on the evidence. It was relevant that the applicant had accepted employment on the basis of a contract which did not include such representations. Instead, he accepted the minimum award notice provisions. It was also relevant that after his termination, he accepted two further contracts which contained similar terms. 40 As to the commission claim, it was plain that the applicant sought to double dip. The award provisions applied to this employment. They required that commission earned by an exchange of contract prior to termination, which later resulted in payment of commission to the employer from a settlement after termination, resulted in commission payable to the employee. It was acknowledged that some such commission was outstanding to the applicant, but the amount was in issue. 41 It followed, however, it was submitted, that the claim, in truth, was a breach of contract claim, at least in part. 42 As to the applicant's contention that he was entitled to average commission, during a notice period, it would be taken into account that such an approach departed considerably from industry practice. On the applicant's approach, it would also involve double counting. 43 In any event, the applicant had mitigated his losses, as the evidence of the applicant's remuneration in the 12 months after his termination showed.

Did the respondents have a proper basis for terminating the employment contract summarily, without notice? 44 It was common ground that the decision to bring Mr Farr's employment to an end had already been made, when Mr Everard met with both Mr Farr and Mr Daniels on 5 March. Mr Everard was prepared to let Mr Farr resign, but if he declined, his intention was to dismiss Mr Farr summarily for breaching his confidentiality obligations. On Mr Everard's evidence, he was prepared to permit Mr Farr to resign because he regretted having to dismiss him, as he was then one of The Professionals' most successful salesmen. Mr Farr's evidence was that he was not prepared to resign, because he had not disclosed any confidential information, as Mr Everard claimed. 45 There was no question that the decision to terminate this employment had been reached as the result of Mr Mainwaring's complaint. This was not, however revealed to Mr Farr, who did not learn of the complaint until after these proceedings had been commenced, when affidavits were served by the respondents. In his evidence, Mr Farr denied that he had provided any confidential information about Mr Mainwaring to Starr Partners. On his evidence, it was not in his interest to reveal information which could jeopardise his ability to obtain listings, make sales and earn commission income. That he was one of the respondents' best salesmen, when his employment was terminated, showed that he had not breached his obligations, as claimed. 46 Mr Everard agreed that Mr Farr was one of The Professionals' most successful agents. He also agreed in cross examination, that it would not have been in Mr Farr's interests to disclose information to competitors of The Professionals and that he had not seen any drop in Mr Farr's performance, in terms of achieving listings or sales, at this time. Nor was there any evidence that The Professionals' business was suffering. 47 Despite this, the respondents' evidence showed that there was no investigation of Mr Mainwaring's complaint, by either Mr Everard or Mr Williams, before the decision to dismiss Mr Farr was made. They did not tell Mr Farr of the complaint, or ask him as to what he knew of the matter. They also did not consider the possibility that someone other than Mr Farr was the source of the information regarding Mr Mainwaring. 48 Mr Williams conducted no investigation of Mr Mainwaring's complaint, other than to confirm that Mr Mainwaring had paid a holding deposit for the premises in question. He did not speak to Mr Farr about the matter. All that Mr Williams did was to convey to Mr Everard that the complaint was:

"John Mainwaring rang and said that he has a letter from a lawyer for Starr Partners saying he is in breach of an agreement because he is trying to set up business. Joe Farr showed him a property and he says no one else knew about it."

49 Mr Everard confirmed that this was the extent of their conversation. 50 Mr Williams and Mr Everard plainly assumed that Mr Farr was the source of the information. Mr Mainwaring had not himself suggested that to Mr Williams. On Mr Mainwaring's evidence, their conversation was:

Me "Rob, I just got a letter from lawyers for Starr Partners, how did they find out that I was going to lease the premises at Somerset Avenue?

51 On Mr Mainwaring's evidence, he suspected Mr Farr, despite having told him when paying the deposit that "This must be kept confidential due to the problems I am having with Starr Partners." Mr Farr had replied "Of course it will be". The reason for Mr Mainwaring's suspicions appear to have been that it was Mr Farr who he had dealt with at The Professionals. He suspected a connection between Mr Farr and Starr Partners. His evidence was that while he worked at Starr Partners, Mr Richardson had provided information at staff meetings as to The Professionals' sales figures, which he claimed had come from Mr Farr. There was no suggestion, however, that Mr Mainwaring told Mr Williams about this, when making his complaint. 52 On Mr Farr's evidence, he was not the only person aware of Mr Mainwaring's interest in leasing the premises. Other staff were aware that Mr Mainwaring had left a deposit for the lease with The Professionals. Mr Mainwaring and his wife had attended the office for that purpose; they were there, at The Professionals' front counter, for about 15 minutes; and the deposit was received by another staff member. They were seen there by others present in the office; they were also visible from the street and even from the premises of Starr Partners, located across the road. Both The Professionals and Starr Partners were then engaged to lease the premises Mr Mainwaring was interested in. Mr Mainwaring had also himself inspected the premises, which were located near both the premises of Starr Partners and The Professionals. 53 Mr Farr did not have the opportunity to raise any of these matters with Mr Everard, because Mr Everard did not reveal Mr Mainwaring's complaint to Mr Farr, nor did Mr Williams. Mr Everard did not know Mr Mainwaring, but simply accepted Mr Williams' advice that Mr Mainwaring had complained; that Starr Partners' solicitors had written to Mr Mainwaring about his intention to go into business as a real estate agent and that this had occurred as the result of their receipt of Mr Mainwaring's confidential information from Mr Farr, about Mr Mainwaring's interest in leasing the premises. There was no evidence that either Mr Everard or Mr Williams ever saw the letter. Mr Everard did not speak to Mr Mainwaring, or Mr Farr about the complaint. Mr Everard assumed both that Mr Mainwaring had a foundation for his complaint and that Mr Farr was responsible for Starr Partners learning of Mr Mainwaring's dealings with The Professionals. 54 The respondents accepted that in these proceedings, they had the onus of establishing that they had a foundation for exercising the right to summarily dismiss Mr Farr for misconduct. Albeit in another context, the nature of such an onus was discussed in Wang v Crestell Industries Pty Limited (1997) 73 IR 454 at pp 463 and 464, viz:

"…The onus of proof in such a case is on the employer and the standard of proof must be such as to enable a positive finding that the misconduct occurred. The standard is, of course, the civil and not the criminal one, but the requisite degree of satisfaction must have regard to the seriousness of the alleged conduct and the gravity of the consequences of the finding. The satisfaction must be such as to warrant a positive finding of the type referred to by the High Court of Australia in M v. M (1988) 63 ALJR 108 and by Dixon J in Briginshaw v. Briginshaw (1938) 60 CLR 336 at p.362..."

55 On the evidence, I am satisfied that this onus was not met. 56 So far as Mr Mainwaring's complaint was concerned, the respondents' case largely rested on what was submitted to be the unreliable evidence of Mr Farr and Mr Nicholson. 57 After his dismissal, Mr Farr took up employment with Starr Partners and later became a principal of that firm. He later left and moved to Queensland, where he continues to operate in the real estate industry. His employment with Starr Partners appears to have confirmed the respondents' suspicions of Mr Farr. That he took up such employment, was however, on the evidence, not surprising. While in competition with each other, it was not uncommon for the two real estate agencies to employ staff formerly employed by their various local rivals. Mr Everard was himself then dating Starr Partners' receptionist and some time after Mr Farr's dismissal, The Professionals sold a rent role to Starr Partners, with the result that other of The Professionals' staff then also took up employment with Starr Partners. 58 Mr Farr's dismissal appears to have become known in the market, the same day it occurred. On the evidence he was a good salesman, with a reputation for being so and accordingly, it seems unsurprising that Starr Partners, or other of the respondents' competitors, might be interested in acquiring his services. Nor could it be surprising that he might accept such an offer. On his evidence, shortly after his dismissal, Mr Farr had two offers of employment to consider. That afternoon he received an offer of employment from another agency, as well as receiving the Starr Partners' offer, after he met Mr Richardson in the street. It was Mr Richardson who suggested that Mr Farr should consider employment with Starr Partners, and then raised the possibility with Mr Nicholson, who telephoned Mr Farr the same afternoon. 59 That Mr Farr would need to take other employment, could have been no surprise to the respondents, given that he had been summarily dismissed for misconduct, without being given either notice or payment in lieu. Indeed, it was common ground that Mr Farr was not even paid all that was due to him on termination. Even at the hearing, the respondents accepted that it still owed him outstanding commission payments. 60 Having been headhunted by The Professionals from a well paying job in the car sales industry only some 20 months previously, with assurances that his employment at The Professionals would be long term and secure, it must have been obvious to Mr Everard, that Mr Farr would have to seek other employment, once he was summarily dismissed. 61 Nothing in his employment contract, or what Mr Everard had told Mr Farr in the termination interview, could have suggested to Mr Farr that taking the offer he later received from Starr Partners, was not appropriate. That agency was not mentioned by Mr Everard, when he dismissed Mr Farr, it was his connection with Mr Iskra, which appears then to have been at the heart of Mr Everard's concerns. Nor was there any legal restraint on Mr Farr accepting such an offer. Mr Farr shortly had both an offer from Combined Real Estate and that of Starr Partners to consider. He decided to accept employment with Starr Partners. That was confirmed with an offer letter of 11 March. It follows that the fact that Mr Farr took up employment with Starr Partners, could not of itself lead to an inference that Mr Farr had earlier provided Starr Partners with confidential information about Mr Mainwaring. 62 Mr Farr himself denied having done so. Mr Farr also called evidence from Mr Nicholson in his case. In his affidavit evidence, Mr Nicholson denied having discussed Mr Mainwaring's dealings with Mr Farr, while Mr Farr was employed by The Professionals. His affidavit did not reveal the source of the information which Starr Partners had received about Mr Mainwaring, which caused them to write to him. In cross examination, Mr Nicholson explained that he had not dealt with this in his affidavit, because his affidavit had merely reflected answers he had given to questions he had been asked by Mr Farr's instructing solicitors. As to how Starr Partners came to write to Mr Mainwaring, about his endeavour to lease the premises in question, Mr Nicholson explained that they had received this information 'from other sources', not Mr Farr. 63 That such affidavit evidence was called from Mr Nicholson in Mr Farr's case was not surprising. There was no onus on him to establish the source of the information on which Starr Partners had acted, when writing to Mr Mainwaring. Mr Nicholson was rather called to corroborate Mr Farr's evidence, that the source was not him. 64 In answer to further questions, Mr Nicholson explained that his partner, Mr O'Sullivan, had been dealing with Mr Mainwaring. Mr Mainwaring had been a principal of Starr Partners, who had left abruptly in acrimonious circumstances, which had led to threatened litigation. Mr Mainwaring was subject to a restraint, which Starr Partners intended to enforce. Starr Partners were also negotiating with Mr Mainwaring, to buy him out of his interest in the business. These matters were all dealt with in the letter which Starr Partners' solicitors sent to Mr Mainwaring and which led to his complaint to Mr Williams. 65 When cross examined about discussing Mr Mainwaring with Mr Farr, Mr Nicholson said that some time after Mr Farr was employed at Starr Partners, Mr Nicholson was discussing Mr Mainwaring with Mr O'Sullivan. Mr Farr was there and it sounded to Mr Nicholson from what he said, as if Mr Farr was aware of Mr Mainwaring's attempted leasing of the premises at Narellan. 66 When further pressed, Mr Nicholson explained that he had earlier become aware of Mr Mainwaring's attempt to lease the premises through the owner of the premises. That information had come to him from Starr Partners' property manager, Ms Bolton. Mr Nicholson understood that Ms Bolton had spoken to the building owner about the lease of the premises and that it was he who had mentioned Mr Mainwaring's interest in the premises to her. 67 None of this evidence was touched on in Mr Nicholson's affidavits. Mr Nicholson also insisted in his oral evidence, that despite saying in his affidavit that he had not discussed Mr Mainwaring with Mr Farr before 8 March 2003, when Mr Farr was dismissed by Mr Everard, he had, in fact, never discussed Mr Mainwaring leasing premises in Narellan, with Mr Farr. This however, contradicted evidence given by Mr Farr in cross examination. 68 Mr Farr's evidence was that it was only when he read Mr Mainwaring's affidavit, that he became aware of the allegation that it was he who had informed Starr Partners of Mr Mainwaring's interest in leasing the Narellan property. He was then still with Starr Partners and had asked Mr Nicholson about who had given Starr Partners that information, but Mr Nicholson had refused to tell him. 69 Mr Nicholson was later recalled. He said that after giving his earlier oral evidence, he had realised that he had been in error as to the identity of his property manager. At the relevant time, the manager was Ms Whelan, not Ms Bolton. He denied having sought to correct this evidence, only after being put on notice of an affidavit sworn by Mr Everard after the earlier hearing, in which Mr Everard deposed that at the time of these events, Ms Bolton was employed by The Professionals, not Starr Partners. On Mr Nicholson's evidence, he had realised his error shortly after giving his evidence and had alerted Mr Farr's solicitors to that fact. He could not explain why his further affidavit had not been prepared until after Mr Everard's affidavit had been sworn. 70 Both Ms Whelan and Ms Bolton were also called to give evidence. Ms Whelan's evidence was that she could remember learning that Mr Mainwaring was interested in leasing the property and discussing this with Mr Nicholson. Both Starr Partners and The Professionals were then acting for the owner of the building, seeking to secure a lessee for the premises. In cross examination, it became clear that Ms Whelan could not remember who gave her this information, or when she received it, although she could remember discussing it with Mr Nicholson at the time. While it was possible that her source was the building owner, she agreed that it was even possible that it was Mr Nicholson who had been her source, she simply could not remember. She was, however, firm in her recollection that she had not spoken to Mr Farr about the matter. 71 Ms Bolton's evidence was that at the time, she was working for The Professionals, not Starr Partners. She only commenced working for Starr Partners later in the year, after The Professionals had sold it a rent role. 72 The principal of the company which owned the premises, Mr Drinnan, was also called by the respondents. He denied having been told at the time, that Mr Mainwaring was interested in leasing the premises. On his evidence, he was then dealing with Mr Farr at The Professionals and Ms Bolton at Starr Partners. He had not been introduced to Mr Mainwaring when he was with Starr Partners, nor had he been told of his interest in leasing the premises. He also denied knowing or dealing with Ms Whelan and denied that he might have forgotten what he had been told about Mr Mainwaring. 73 The obvious inference from Mr Drinnan's evidence was that he could not have been the source of Starr Partners' information about Mr Mainwaring, as was Mr Nicholson's evidence. While that must be accepted, still his evidence had to be approached with some caution. Both agencies had been engaged to lease Mr Drinnan's premises. Mr Drinnan's recollection was inaccurate in one respect, at least. His evidence was that he did not know Ms Whelan and had been dealing with Ms Bolton at Starr Partners. On the evidence of Mr Everard, Mr Nicholson, Ms Whelan and Ms Bolton, however, Ms Bolton was not then employed by Starr Partners and so Mr Drinnan can not have been dealing with her for Starr Partners, at the relevant time. On her evidence, she was involved in the efforts which The Professionals was making at the time, to lease the premises. 74 What all of this evidence showed, was that at the time of the dismissal, the respondents had no basis for exercising a right to dismiss Mr Farr summarily for misconduct, in relation to Mr Mainwaring's complaint. In these proceedings Mr Farr did not have the onus of demonstrating that it was not he who had breached Mr Mainwaring's confidence and provided information to Starr Partners, contrary to his obligations to The Professionals. The onus rather fell on the respondents to establish the misconduct it had relied on, to summarily dismiss Mr Farr. 75 Even in this hearing the respondents led no evidence going to those matters, but relied on the evidence called in Mr Farr's case, in order to make good the submission that had they investigated Mr Mainwaring's complaint at the time, nothing more would have been uncovered, given that the coercive processes of the Court would not then have been available to them. 76 There were several difficulties with that submission. Firstly, had the respondents bothered to conduct any investigation at all into the complaint at the time, Mr Farr's denial of what was suspected, could have been considered. Whether someone else in The Professionals' employ other than Mr Farr, might have been the source of the information, could have also been investigated. That other employees of The Professionals were in possession of that information, was not challenged. Even in defending these proceedings, however, such an investigation was not conducted and no evidence was called from other employees, to discount that obvious possibility. 77 Nor was evidence called from Mr Iskra. He was the person of whom mention was made by Mr Everard at the time of the dismissal, as the recipient of the respondents' confidential information. In cross examination, Mr Everard's evidence was that Mr Farr 'was terminated for breaches of confidentiality' and that those breaches referred to 'discussing business information with Tony Iskra'. I accept that Mr Iskra was not then in the employ of the respondents and may not have answered any enquiries made of him, if the respondents had asked him at the time. He and Mr Everard had then had a falling out. Mr Iskra was, however, in the employ of The Professionals at the time of these proceedings and yet still no evidence was called from him. 78 I accept that the obvious inference from the failure to call Mr Iskra in the respondents' case, was that his evidence could not have assisted in demonstrating that Mr Farr had breached Mr Mainwaring's confidentiality. Indeed, it was not even put to Mr Nicholson or Mr Farr, that Mr Iskra was the source of the information received by Starr Partners. 79 While the credit of both Mr Nicholson and Mr Farr were impugned by the respondents, in order to satisfy the onus which fell upon them, I am satisfied that this could not sustain the case the respondents had to demonstrate. While a somewhat difficult witness, I was unable to conclude that Mr Farr was an untruthful one. Both he and Mr Nicholson denied having discussed Mr Mainwaring before Mr Farr was dismissed. On Mr Nicholson's evidence, he had not spoken to Mr Farr for a number of years before his dismissal by The Professionals. He knew of Mr Farr's reputation and it was another Starr Partners' employee, Mr Richardson, who told him of the opportunity to secure Mr Farr's employment, after he was dismissed. It was at that time that he spoke to Mr Farr. 80 I do accept that there were difficulties with Mr Nicholson's evidence, which departed in a number of ways, both from that given by Mr Farr and by Ms Whelan. Both Mr Farr and Mr Nicholson denied discussing Mr Mainwaring before Mr Farr was employed by Starr Partners, but their recollection as to their later conversation differed somewhat. In a contest between the evidence of Mr Farr and that of Mr Nicholson, I would prefer Mr Farr's recollection of this matter. His evidence was, that after he took up employment with Starr Partners and became aware of the allegation against him, he asked Mr Nicholson how Starr Partners came to know of Mr Mainwaring's interest in leasing the premises. Mr Nicholson refused to tell him. Mr Nicholson could remember having discussed Mr Mainwaring with Mr Farr and Mr O'Sullivan, but could not recollect having been asked that question, or refusing to provide Mr Farr with an answer. Given the totality of Mr Nicholson's evidence and the importance of this matter to Mr Farr, by comparison to Mr Nicholson, I prefer Mr Farr's evidence on this point. 81 I am, however, entirely unable to conclude that the proper inference from all of the evidence, was that it was Mr Farr who gave information to Starr Partners about Mr Mainwaring, in breach of his confidentiality obligations to The Professionals. Nor indeed, was there evidence from which it could be concluded that Mr Farr had provided any such confidential information to Mr Iskra, despite that being the reason given for his dismissal. 82 On the evidence, it follows that it must be concluded that the respondents have not made out the evidentiary onus which they had to meet, as to these matters. 83 Confidentiality was a matter of obvious concern in this highly competitive industry. It was expressly dealt with in the employment contract and in The Professionals' policies. Mr Williams' evidence was that he had discussed the need for confidentiality to be maintained, at staff meetings, as Mr Farr corroborated. Mr Williams recalled Mr Everard then saying 'There are some staff who we have let go, and they now work with the competition. I don't mind you keeping the friendships, but you can't discuss our confidential business.' 84 Mr Farr denied ever having breached the respondents' confidentiality. Mr Everard had concerns about Mr Farr continuing to socialise with Mr Iskra and providing him with confidential information about The Professionals. There was no evidence, however, that he had ever told Mr Farr of such concerns prior to the dismissal. Nor was Mr Iskra called to establish that Mr Farr had provided him with such information. 85 Given Mr Mainwaring's affidavit evidence, it would appear that he informed Mr Everard after Mr Farr's dismissal, that while he was with Starr Partners, Mr Richardson had provided confidential information from The Professionals at Starr Partners' staff meetings, identifying Mr Farr as the source of that information. Mr Farr denied having provided such information. Both Mr Richardson and Mr Nicholson also denied that such information had been provided. While it was submitted for Mr Farr that this was not the reason for dismissal, there is no doubt that the respondents were entitled to rely on after acquired knowledge in proceedings such as this. As Kavanagh J recently discussed in Gordon Meggatt v Australian Business Limited [2007] NSWIRComm 182 at [90] - [92]:

90 Although unknown at the time of the termination of the applicant's employment, the applicant's behaviour at the Ingleside Conference dinner was not limited to offensive behaviour towards Ms Bradford. His behaviour included conversations and acts with other female employees of the respondent who found the type of attention paid to them by the applicant unwelcome and offensive. The respondent submits this evidence is relevant to the court's consideration. In Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359, Starke J held (at 373): The fact that the appellant's misconduct was unknown to the respondent at the time of the termination of the agreement is quite immaterial. If there was, in fact, any circumstances in existence at the time of the termination of the agreement which could have justified the respondent in so terminating it, then it may justify the termination by subsequent proof of those circumstances ( Smith's Law of Master and Servant , 5th ed., p 107; Taylor v Oakes Roncoroni & Co . (1922) 27 Com. Cas. 261, at p 266; Swale v Ipswic Tannery Ltd (1906) 11 Com. Cas. 88, at p 98). And in Sunbird Plaza Proprietary Limited v Maloney and Another (1988) 166 CLR 245, Mason CJ adopted this view saying (at 262): Shepherd v. Felt & Textiles of Australia Ltd (1931) 45 CLR 359 stands as authority for the general proposition that a termination of a contract may be justified by reference to any ground that was valid at the time of termination, even though it was not relied on at the time and even though the ground actually relied on is found to be without substance. . . .

91 In an unfair dismissal case, Bankstown City Council v Paris (1999) 100 IR 363 (at 370) the Full Bench commented: . . . This Commission and its predecessors have never accepted the proposition that an employer dismissing an employee is confined necessarily to the reasons advanced to the employee at the time of dismissal. If relevant circumstances existed at the time of dismissal of which the employer was not aware but which would either themselves or in concert with the reasons advanced, support dismissal, they may be relied upon. Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 467; 61 IR 32 at 73-74 is a relatively recent recognition by the High Court of a parallel approach which has been extant in the common law for a much longer period. For example, in Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373) Starke J said . . .

92 Also relevant is Concut v Worrell (2000) 103 IR 160 at [29] where Gleeson CJ, Gaudron and Gummow JJ expressly relied upon the "general rule" enunciated in earlier contract dispute cases such as Shepherd to find an applicant's employment contract had been justifiably terminated based upon misconduct unknown to the employer at the time of termination.

86 Mr Farr however, denied having provided such information to Mr Richardson. His evidence was corroborated by Mr Nicholson and Mr Richardson. This issue can only be resolved on the basis of credit. Of all of those involved, it was Mr Richardson who had no interest at all in the dispute between Mr Farr and the respondents. He also had no interest in the dispute between Mr Mainwaring and Starr Partners. He had no reason to do anything other than to adhere to his oath. I have no reason to doubt his evidence and have concluded that it must follow that the evidence of Mr Richardson, supported as it was by that of Mr Farr and Mr Nicholson, must be preferred over that of Mr Mainwaring, on this issue. 87 It follows that it must be concluded that the respondents had no basis for claiming that the summary dismissal of Mr Farr could rest on these allegations. In failing to give Mr Farr notice of his dismissal, the respondents were clearly in breach of their contractual obligations to him. It is against that background, that I turn to the various complaints made in relation to the fairness of this contract.

The fairness of the respondents' investigation process 88 At the time Mr Everard was told of Mr Mainwaring's complaint to Mr Williams, he surmised that information about Mr Mainwaring's pursuit of a lease had come to Starr Partners' attention as the result of something Mr Farr had told Mr Iskra. How he came to that view was not explained. 89 Mr Iskra had worked with The Professionals and at one time, had been a part owner of the Campbelltown office. He had been involved in Mr Farr's initial employment and Mr Farr had then worked with Mr Iskra at The Professionals. Mr Iskra and Mr Everard had had a falling out and Mr Iskra had left The Professionals. The circumstances were not revealed on the evidence. At the time of Mr Farr's dismissal, Mr Iskra was working at another real estate agency. He did not work for Starr Partners. Mr Farr and Mr Iskra were known still to socialise together. At the time of the resumed hearing in August, when Mr Everard was recalled to give evidence, Mr Iskra was again working at The Professionals with him, but despite the re-opening of the respondents' evidentiary case, no evidence was called from him. The proper inference is that whatever the reason for the falling out between Mr Iskra and Mr Everard, their differences had been resolved. 90 Plainly enough, at the time of the dismissal, Mr Everard must have surmised that Mr Farr had told Mr Iskra about Mr Mainwaring's interests in leasing premises to open another agency at Narellan, information which Mr Iskra had then passed on to Starr Partners. In cross examination, Mr Everard agreed that he had not been present during such discussions and did not know that Mr Farr had passed confidential information to Mr Iskra. He also agreed that at the termination meeting, Mr Farr had denied having given Mr Iskra any confidential information and that he had asked what it was that he was supposed to have done. Mr Everard did not answer his questions. 91 Mr Everard's evidence was that at the time, he was 'having my sales figures quoted back by sales managers at other business sales meetings'. Who these people were and what connection they had with Mr Iskra and Mr Farr, was not revealed. Mr Everard did not, however, raise these matters with Mr Farr, nor gave him any opportunity to deal with Mr Everard's suspicions. 92 Mr Everard denied that Mr Iskra and his concerns about confidential information was just an excuse for dismissing Mr Farr and that the real reason was because he was much more highly paid than other sales staff, explaining that it would not have been in his commercial interest to dismiss Mr Farr for such a reason. 93 It would also appear not to have been in Mr Everard's commercial interests to summarily dismiss such a highly paid, successful agent as Mr Farr, on the basis of the uninvestigated suspicions of a man Mr Everard had never met. Nevertheless, given Mr Everard's reference to Mr Iskra in the termination discussion, it appears that he assumed that Mr Farr must have told Mr Iskra about his dealings with Mr Mainwaring and that Mr Iskra had passed this information on. 94 Mr Everard did not speak to Mr Mainwaring; he did not ask to see the solicitor's letter; he did not enquire whether Mr Mainwaring or his wife had spoken to anyone else about Mr Mainwaring's intention to lease the premises he had discussed with Mr Farr; he did not enquire whether any of his other staff were aware of Mr Farr's dealings with Mr Mainwaring; or whether they had discussed the matter with someone connected with Starr Partners. Mr Everard did not even ask Mr Farr what he knew about the complaint. Nor did he ask the building owner, what, if anything he knew of the matter. He also did not consider the possibility that someone from Starr Partners had seen Mr Mainwaring inspecting the building, even though it was known to The Professionals that both agencies had been engaged to lease the premises, they each having their sign displayed at the premises. 95 So far as an investigation of serious misconduct which might warrant summary dismissal is concerned, it must be concluded that the processes here undertaken were as far removed from what any attempt to ensure fairness would require, as could be imagined. Mr Mainwaring was completely unknown to Mr Everard, yet his complaint was simply accepted and acted on, without any investigation at all. Nor was the alleged misconduct which put Mr Farr at risk of summary dismissal, even revealed to him. The matter was never put to Mr Farr and he was never given any opportunity to respond to it. 96 The course of conduct pursued by the respondents was, in the circumstances, quite an extraordinary one. On Mr Everard's own evidence, Mr Farr was one of The Professionals' most successful salesmen. He had been headhunted for the position some 20 months previously, having received repeated assurances from the two principals of the firm, that the position was a secure long term one; he was highly paid and he had succeeded. It was not in Mr Farr's interests to undermine any transaction from which he or The Professionals could earn income. He was being paid under a salary and commission scheme, which depended on The Professionals competing successfully with other agencies, including Starr Partners. It was not rational that Mr Farr would be putting Mr Mainwaring, from whom he had taken a deposit for a lease, into a position where his ability to conclude the lease, would be jeopardised. Nor was it rational for Mr Everard to have dismissed Mr Farr for the complaint which Mr Mainwaring had made, without any investigation of its substance. 97 On the evidence, I am well satisfied that this contract, in permitting the respondents to so conduct themselves, was unarguably unfair. As the Court of Appeal observed in Sydney Water Corporation & Anor v Industrial Relations Commission of NSW & Anor [2004] 6 NSWLR 661 'unfairness may of course stem from what the contract fails to provide, for example, as regarding termination procedures' (at [25]). 98 That conclusion must result in an order of variation of the contract, to remove that unfairness. The fact that the respondents headhunted the applicant away from well paid, secure employment elsewhere, to a job in a 'good business', which would provide him with 'good opportunities', as was Mr Everard's own evidence, reinforces that conclusion. Had the respondents revealed to Mr Farr, the approach which they would adopt to the investigation of a complaint such as that made by Mr Mainwaring, it could not reasonably be thought that they would have had any prospect at all of attracting Mr Farr to the employment of The Professionals. 99 It was common ground that Mr Farr's contractual termination provisions reflected the provisions of the minimum requirements of the Real Estate Salesman's (State) Award. Other than in the case of summary dismissal for misconduct, it required Mr Farr to give one week's notice of termination and provided a sliding scale for The Professionals: The Employee's Period Minimum Period of of Continuous Service Notice Not more than 1 year 1 week More than 1 year but less than 3 years 2 weeks More than 3 years but less than 5 years 3 weeks More than 5 years 4 weeks

If the Employee is 45 years of age or older and has been employed by the Employer for at least two years, the Employee is entitled to an additional one weeks' notice (or payment of salary in lieu of notice). 100 On the evidence, Mr Farr was well aware of the short notice period which he was agreeing to, before he agreed to this employment. He was not concerned about that, however, given his satisfaction as to the nature of the respondents' business; the assurances he had received from Mr Everard and Mr Dickinson that his employment would be long term and secure and his satisfaction with the other terms offered. 101 The contract was entirely silent on the question of what steps, if any, should be taken by The Professionals in investigating any complaints or concerns, or before exercising the right to summarily dismiss. The evidence demonstrated the unfairness of the contract, in failing to make such provision, given the way in which Mr Everard felt free to conduct himself. That unfairness was particularly acute, given the nature of the remuneration provisions of this contract. 102 Mr Farr was a highly remunerated employee, although his remuneration depended in large measure on his commission arrangement, with his base salary being relatively low. Under the commission scheme, Mr Farr became entitled to a commission payment on exchange, but commission was not paid until the respondents had themselves received the commission, after the settlement of the sale of a property. In the case of termination, Mr Farr was entitled to be paid commission on exchanges made before termination, although the commission did not become payable until settlement, even if that occurred after the date of termination. 103 The details of the commission scheme were varied by the respondents from time to time, during the course of the employment. While Mr Farr's dissatisfaction with some of the unilateral changes made, was explored in the evidentiary case, no money orders were finally pressed in relation to such alterations. 104 Nevertheless, it followed from the respondents' failure to follow any sensible or fair investigation process, that Mr Farr was deprived of the opportunity to earn commissions while such an investigation was conducted. This too, was undoubtedly, unfair. That unfairness was exacerbated by the respondents' failure to give Mr Farr notice of termination, when the respondents had, in fact, no basis to dismiss Mr Farr summarily for misconduct. If notice of termination had been given, the opportunity to earn further commissions would also have arisen during the notice period; the parties' contract not giving the respondents the right to make any payment in lieu of notice. 105 Had this contract provided the least guidance on what investigation should have been conducted by the respondents, into an allegation of misconduct so serious that summary dismissal might follow, it is inconceivable that the respondents would have acted in the way in which they did upon receiving Mr Mainwaring's complaint. On the evidence, it is difficult to imagine that a person concerned with his commercial interests, as was Mr Everard's evidence was his concern, would have dismissed Mr Farr from his employment, if Mr Mainwaring's complaint had been properly investigated. Mr Iskra's subsequent return to The Professionals, only confirmed this impression. 106 It follows that the unfairness of this contract had serious and unfair consequences for Mr Farr, which must be reflected in an appropriate money order. 107 It should finally be observed, at this point, that at one stage of the proceedings, the respondents raised the provisions of s 109A of the Act, as precluding the Court from dealing with such a complaint. That submission was not finally pressed. (See Bell & Berg v Macquarie Bank Ltd [2002] NSWIRComm 235; Anthony Balsdon v Murray Irrigation [2003] NSWIRComm 251; Bell & Berg v Macquarie Bank Ltd [2003] NSWIRComm 363 and Steinhardt v Sapphire Bioscience Pty Ltd [2004] NSWIRComm 42.) 108 As to the terms of the variation to the contract, I do not accept that fairness requires the elaborate provisions sought by Mr Farr. In adopting this approach, I have had in mind the approach of the Full Bench in Westfield Ltd v Helprin (1998) 82 IR 411 at 438. In this case, I take the view that it is sufficient and appropriate that the contract be varied ab initio to require the respondents to:

1. fairly advise Mr Farr of any allegations of misconduct, which might jeopardise his employment, in terms sufficient to enable him to properly consider and respond to what has been alleged against him;

2. to fairly consider and investigate whether the alleged misconduct had in fact occurred including by reference to any response which Mr Farr might make; and

3. if the view is reached that such misconduct did occur, to promptly advise Mr Farr of the conclusions which have been reached and whether or not the result of that consideration is to have any consequences for his ongoing employment.

The fairness of the notice provision 109 That conclusion, however, leaves still to be considered the fairness of the notice provision itself. There having been no basis upon which Mr Farr could have been dismissed for misconduct, it is unarguable that he was contractually entitled to have received the agreed two weeks' notice, given Mr Everard's decision to dismiss. 110 Mr Farr however, claimed that the notice provisions of the contract were also unfair. This claim rested on the fact that Mr Farr was headhunted away from secure employment elsewhere, where his income was $160,000 per year, with promises of long term, secure employment. He claimed that he was told:

Mr Everhard(sic): "We want you to come work for us."

Me: "I don't want to give up my job unless I have something better to go to."

Mr Everhard(sic): "We're like a family here. If you come and work for us we will want you for the long haul. You'll have the job for the rest of your days."

111 Mr Everard denied this conversation in his affidavit. His evidence was that he had told Mr Farr 'We have a good business, and there are good opportunities, if you want to take them.' In his reply affidavit, Mr Farr's evidence was that Mr Everard also told him that:

"You will be treated like family and when you come to work for Barry Dickinson, it is for life. He has had employees that have been with him for 20 years."

112 In cross examination, Mr Everard's evidence was:

Q. When you were having this interview with Mr Farr in April 2001, Mr Farr made it clear to you that it was a crucial factor in his decision making process as to whether to accept an offer of employment with the first respondent that he receive a remuneration package at least as good as that he was on with the Lexus dealership? A. No.

Q. I put to you in fact he made it clear that he was in a good employment? A. Yes.

Q. That he was earning a good salary? A. Yes.

Q. And that in order to leave that employment and go to another employment with your company, that he wouldn't leave unless he was getting something at least the same remuneration if not better? A. No.

Q. Well, didn't he say to you "I'm working at a Lexus dealership and I'm earning $160,000"? A. Yes.

Q. "I won't give up that job unless I'm going to one better"? A. No.

Q. I put to you that Mr Farr made it quite clear that it was an important part of his decision making process that he be going to a job that was better than the one he was then in. Do you agree with that? A. I agree it would be part of his decision making process.

Q. And he made that clear to you in the course of that meeting? A. Yes.

Q. He also made it clear to you, sir, that security of employment was an important matter? A. Yes.

Q. And in order to address his concerns regarding security of employment, you said to him "We're like a family here"? A. Yes.

Q. "And if you come and work for us we want you for the long haul"? A. Yes.

Q. "And you will have a job for the rest of your days"? A. No.

Q. Sir, do you recall Mr Dickinson saying in that meeting that he had employees who worked for him for many years? A. Yes.

Q. And that was said by Mr Dickinson in response to Mr Farr's concerns about potential security of employment? A. Yes.

Q. You made it clear it was a good business and there were good opportunities for Mr Farr? A. Yes.

Q. You and Mr Dickinson were seeking to reassure Mr Farr that if he accepted a role he would be able to earn a similar amount remuneration? A. Yes.

Q. And that he was moving into a secure role? A. Yes.

Q. So Mr Farr did not accept your offer of employment at that initial meeting, did he? A. No.

113 Neither Mr Dickinson or Mr Iskra, who were also present, were called to give evidence. There is no reason to doubt Mr Farr's evidence, finally largely corroborated by Mr Everard, that in order to secure Mr Farr's services, he was given the assurances which he sought in relation to long term, secure employment being offered to him at The Professionals. 114 In cross examination, Mr Farr agreed that when he later received The Professionals' offer letter, he was conscious that the termination provision was not consistent with those representations, but he did not raise that with anyone. He was simply content to rely on the assurances he had received. For his part, Mr Everard agreed that Mr Farr was offered The Professionals' standard terms and that he was not offered any special consideration as to termination, given the circumstances in which he came to be employed, or the assurances he had been given. 115 This aspect of the contract was never discussed, either before Mr Farr commenced employment or when he was summarily dismissed. Mr Farr explained that on termination, he was generally concerned with the unjust treatment he had received. 116 When cross examined, Mr Farr also agreed that the contractual notice provision reflected an industry norm and that it was in similar terms to the notice provisions which he agreed with Starr Partners, whose offer of employment he accepted two days after his dismissal. Other witnesses gave corroborating evidence. In May 2003, Mr Farr left the Starr Partners' Narellan office and took up employment with another company in the group, which operated a Starr Partners office at Camden. Mr Farr became a shareholder and principal of the company and his employment contract again contained a similar notice provision. Such terms were also offered to other employees, while Mr Farr remained a principal of this company. He left in 2005, to establish his own real estate agency in Queensland, where he agreed that he himself offered employment on similar terms. 117 In cross examination, Mr Farr explained that he, nevertheless, regarded the notice provision here in question to be unfair, because there was no proper basis for him to have been given notice by The Professionals. He also agreed in cross examination, that he believed that his dismissal was unfair and that he was seeking compensation in respect of that unfairness. 118 It must be observed that this evidenced a misunderstanding of the notice provisions, which permitted Mr Farr to terminate the employment on one week's notice and The Professionals to do so on two weeks' notice, for any reason. It was only in the case of misconduct, that the employment could be brought to an end without notice. 119 The effect of section 109B of the Act, is that a claim under s 106 of the Act, that the notice provision of an employment contract is unfair, is not an alternative method for having a claim of unfair dismissal determined by the Court. The Act makes other provision for such claims to be brought before the Commission. Mr Farr had the right to pursue such proceedings, if he believed that his dismissal was unfair. He did not do so and these proceedings are not an alternative way in which to have that complaint dealt with. 120 It follows that this aspect of the claim of unfairness, must be determined in the context of the respondents' representations as to secure, long term employment, which it was claimed the notice provision of the contract did not fairly reflect. The claim was also partly based on a complaint that the employment which Mr Farr was forced to take after his dismissal, after the respondents had failed to make good those representations, was less lucrative than his employment at The Professionals and that the contract operated unfairly for Mr Farr, given the consequences of the conduct which the contract permitted the respondents to engage in. 121 That latter claim was established, at least in the short term, consistently with Mr Everard's evidence as to the time lag agents generally experience in establishing themselves in a new position. At The Professionals, Mr Farr was paid an annual salary, a car allowance, superannuation and commission. In the 2002/2003 tax year, Mr Farr was paid $145,282 by The Professionals, up to his termination on 5 March, although he was paid only to 2 March - a period of some eight months. His total remuneration that year was $166,410, with a further $21,128 earned over the next four months, at Starr Partners, but at an overall rate considerably lower than the earnings which he was generating at The Professionals. 122 At Starr Partners, Mr Farr was paid under a debit/credit system, which involved a lower weekly salary than he was paid by The Professionals, together with commission, a car allowance and superannuation. In August 2003, the weekly salary was increased. Under this arrangement, Mr Farr's weekly salary was debited from commission earnings, on a monthly reconciliation basis. Commission payments were however, generally paid on exchange, rather than on settlement, as had been the system at The Professionals, although there was the right, in certain circumstances, such as a delayed settlement, for Starr Partners to delay the commission payment. Commission was also calculated at different rates - 30% from the first dollar, rising to 50% from $45,000. Commission with The Professionals changed over time, for example, at one point being only payable from $12,000, rising in 5% increments to 55% after $35,000. 123 Mr Farr's evidence in cross examination showed that he did not entirely understand how the Starr Partners' system operated. He was unsure whether, for example, if his employment had been terminated at a time when his commission earnings had not exceeded the salary he had already received, whether he would have been liable to repay that salary. His employment contract at Starr Partners did not contain such a term. I am satisfied, on the evidence, that Mr Farr's weekly salary was not at risk in that way. That situation did not, in any event, arise in his employment at Starr Partners, given the commission he earned throughout his employment there and the period for which that employment subsisted. 124 Mr Farr's commission earnings, from his commencement at Starr Partners, always exceeded his salary. In March 2003, for example, he received a further $1,308.29 commission; in June $2,291.96; in August $3,880.24; and in September $13,474.42. His earnings in the 2003/2004 tax year were $237,958, although on Mr Farr's evidence, this income was affected by operation of the debit/credit commission system in the following year, so that his income was reduced in the following year by some $55,000, on account of the deduction of commission payments made on exchange the preceding year, when settlements later fell through. 125 This evidence did not support a conclusion that Mr Farr was finally worse off in his new employment. Consistently with Mr Everard's evidence, that however, was certainly the case in the initial period of his new employment. 126 On his evidence, Mr Farr was approached by two other real estate agents, immediately following his dismissal by The Professionals. He was not subject to any restraint and so was free to choose between the offers he received. Within days he accepted the Starr Partners' offer and so, within the agreed two week notice period, he was entitled to receive from The Professionals, he began working in the same suburb, competing successfully with his former employer. Even in his first month of employment with Starr Partners, three of his properties were exchanged, although one later fell through and in April, five properties were exchanged. This picture improved rapidly. Mr Farr enjoyed real success at Starr Partners, where he later went on to become a principal in a related company. 127 Mr Everard's evidence in cross examination was that in this industry, when a salesman takes on a new position, it can take 4 - 6 months for sales to be achieved and a reasonable level of commissions to be earned. Consistent with Mr Farr's performance at The Professionals, Mr Farr's work at Starr Partners generated results better than this expectation, no doubt reflective of the fact that he was working in the same area and that he was a very successful agent, but still his income was considerably diminished in the first four months of his new employment. 128 The respondents failed to make good their representations as to Mr Farr's secure, long term employment with The Professionals, which secured his services, even though they were not reflected in the agreed notice period. Fortunately, Mr Farr was able to secure other employment in that period, albeit employment which provided less remuneration, at least at the outset. What was agreed as to notice, reflected the provisions of the applicable award, made by the Commission under s 10 of the Act, to 'establish fair and reasonable conditions of employment'. The award imposed minimum conditions. That was what Mr Farr and the respondents had agreed, despite the assurances Mr Farr had sought and obtained as to the security of the position he was being offered. The parties could have agreed to more generous terms, but they did not. 129 That situation underlined how the award notice provision operates in this industry. In his evidence, Mr Farr agreed that the contractual notice period reflected the industry norm. It was what he also accepted at Starr Partners and what he himself offered other salesmen when he employed them, as a principal of that business. Other witnesses corroborated that evidence. 130 That outcome was fortunate for Mr Farr, but nevertheless, the respondents' conduct and the contract which permitted it, which I have found to have been unfair, still had a very substantial and practical impact on Mr Farr's earnings. It seems to me, on all of the evidence, that all these circumstances were such, that it must be concluded that the contractual notice period operated unfairly, as between these parties in the circumstances of Mr Farr's employment. 131 As the Court's judgment in Goodman Fielder illustrates, there are circumstances in which it may be found that a contractual notice period, which reflects an award provision, is nevertheless, unfair. On the evidence in this case, Mr Farr received assurances that his position would be secure and long term. As Mr Farr agreed in his evidence, such assurances must always be understood as being subject to the right which an employer has to dismiss, just as an employee has the right to leave the employment upon giving notice. I have concluded that there was no right to summarily dismiss Mr Farr in the circumstances of this case. It follows that Mr Farr should have received notice of termination. 132 While the contract which the parties agreed reflected an industry practice of general adherence to minimum award notice conditions, the evidence of the consequences of the respondents' conduct undoubtedly demonstrated that adherence to the award minima rendered this aspect of the contract unfair in the circumstances in which the contract was brought to an end. Mr Everard's evidence as to the consequences of that conduct for Mr Farr, who then had to re-establish himself in new employment, put that conclusion beyond doubt. 133 Given the purpose of contractual notice provisions, I take the view that in all of the circumstances of this employment, fairness requires that the notice period be increased to three months. That time frame pays proper attention to the consequences of the respondents' conduct on Mr Farr's circumstances. That conduct plainly deprived him of the opportunity to continue earning the income which he had been assured was available to him, in the secure employment he had been headhunted to, at The Professionals. The respondents had no basis upon which to resile from those assurances, or to summarily dismiss Mr Farr. A period of three months has regard to both Mr Everard's assessment of what it would take to re-establish Mr Farr in his new employment and what Mr Farr was actually able to achieve.

Money orders 134 Section 106 of the Act provides in ss (1) and (2):

1. The Commission may make an order declaring wholly or partly void, or varying, any contract whereby a person performs work in any industry if the Commission finds that the contract is an unfair contract.

(2) The Commission may find that it was an unfair contract at the time it was entered into or that it subsequently became an unfair contract because of any conduct of the parties, any variation of the contract or any other reason.

(5) In making an order under this section, the Commission may make such order as to the payment of money in connection with any contract declared wholly or partly void, or varied, as the Commission considers just in the circumstances of the case.

136 It was common ground that there were sums due to Mr Farr on termination, which the respondents had not paid, including commission. Justice requires that the money orders which I make will include all outstanding amounts due, but unpaid, under this contract. 137 I also propose to make money orders in respect of notice. There was a contractual obligation to give notice and on the evidence, the respondents had no right to summarily dismiss Mr Farr. Nor was there a contractual right to make a payment in lieu of notice. Had notice been given, Mr Farr would have had the opportunity to continue generating sales and earn commission, as well as receiving other benefits such as superannuation and car allowance, while seeking other employment. I have concluded that the money orders which I make, will reflect that reality. 138 I also accept that a fair assessment of money orders in relation to commission payments during such a notice period, is to have regard to commission earnings in the preceding 12 months. To otherwise approach the money orders made, would be to ignore the true basis of this employment, given the large component of Mr Farr's earnings which commission represented. It would also ignore the practical consequences of the respondents' contract. 139 I have also concluded however, that this sum must be mitigated, by what was earned by Mr Farr during that period at Starr Partners. Mr Farr was able to earn significant income in his new employment over the following year, including salary, commission and benefits such as car allowance and superannuation. The evidence showed that it took him some time to re-establish himself, so far as commission was concerned. Justice does not, however, permit Mr Farr to have both the benefit of the average commission earned during a notice period and actual commission earnings in his new employment, as well as the money value of the benefits flowing from both employment relationships in that same period. 140 While it may generally be the case in this industry that average commission is not paid during notice periods, I am satisfied that justice in this case requires a different outcome, given the consequences of the respondents' conduct for Mr Farr. 141 I have also determined to make a money order in connection with the variation to the contract, in relation to a fair process of investigation, prior to termination. In adopting this approach, I have again had in mind the approach of the Full Bench in Helprin. Had that process been observed, there would have been a further period during which the employment would have subsisted, while that process was properly pursued. Indeed, it appeared to me, on the evidence, that had Mr Everard bothered to turn his mind to such an investigation and fairly considered what it might have revealed, perhaps Mr Farr's employment would not have been terminated at all, given Mr Everard's evidence as to the commercial approach which he adopted to such considerations and the fact that he has apparently even been able to resolve his differences with Mr Iskra. 142 I have assessed this period as a further three weeks, with the money orders to be calculated on the same basis as I discussed above in relation to commission. That, in my view, reflects money orders justly flowing from the variation which I have ordered. I am satisfied, however, that considerations of mitigation do not properly arise in this context, this order being compensatory in nature, not directed at supplementary income, in the period following termination. (See Westfield Holdings v Adams (2002) 114 IR 241 at [141] - [147], albeit there in the context of redundancy payments.) 143 The applicant also seeks an order for interest, which I am also satisfied justice requires be made in this case, from the date of termination to the date of judgment.

144 For the reasons given, I find the contract unfair and order its variation, ab initio, consistently with the terms of this judgment. The applicant should bring in short minutes of the orders reflecting the judgment as to variations to the contract, money orders and costs. As to costs, the usual order would be that costs, as agreed or assessed, should follow the event. The parties have liberty to approach as to costs and the calculation of any money orders, if they are unable to agree. ------------------------

APPLICANT'S LIST OF ISSUES OR FACT AND LAW IN DISPUTE

1. What were the terms of the representations pursuant to which the Applicant entered into the contract or arrangement with the First Respondent? In particular: 1.1 Whether the Second Respondent on behalf of the First Respondent represented to the Applicant that as consideration for the First Applicant entering into the contract or arrangement and performing services there under, the First Respondent would provide long term secure employment; 1.2 Whether the Second Respondent on behalf of the First Respondent represented to the Applicant that he would not be financially disadvantage by leaving his then current employment to accept a role with the First Respondent; Allegations of Misconduct 2 What were the circumstances in which the Applicant was informed by the Second Respondent on behalf of the First Respondent of the decision to terminate the contract; 3 Whether a reason for the termination of the contract was given to the Applicant by the Second Respondent, on behalf of the First Respondent; 4 if so was the reason given : 4.1 to the effect that the Applicant had continued to associate with a former employee of the First Respondent, namely Tony Iskra; 4.2 To the effect that the Applicant had breached the First Respondent's confidentiality; 5 Whether, if any such reason was given, whether it had a basis in fact? 6 If so, did such conduct constitute misconduct? 7 If so, did such misconduct amount to serious and wilful misconduct of a type that would make it unreasonable to require the First Respondent to continue to the employ the Applicant and permit the First Respondent to terminate the contract in accordance with clause 7.4 of the Employment Agreement; 8 Did the conduct of First Respondent, and its officer the Second Respondent, in respect to the circumstances in which the allegations of misconduct were raised result in the contract becoming an unfair one, in particular the failure of the Respondents in circumstances were they had concerns about the Applicant's conduct (including alleged misconduct) failed prior to taking any steps to terminate the Applicant's contract with the First Respondents to provide the Applicant: (i) full written particulars setting out the alleged misconduct; (ii) to give the Applicant a reasonable opportunity to respond to the written particulars of the Performance Concerns; (iii) an opportunity to make written and/or oral representations to the Respondents in relation to the alleged misconduct; and (iv) a reasonable period in which to address the alleged concerns. 9 Whether the contract was or became an unfair contract as a result of the failure of the contract to include a term to the effect that if First Respondent, and its officers including the Second Respondent had concerns about the Applicant's conduct (including alleged misconduct) or the Respondents would, prior to taking any steps that were, or had the potential, to detrimentally affect the Applicant's on-going employment with the First Respondents provide to the Applicant: (i) full written particulars setting out the alleged misconduct; (ii) a period of no less than 2 weeks to respond to the written particulars of the alleged misconduct; (iii) an opportunity to make oral representations to the Respondents in relation to the alleged misconduct; and (iv) a reasonable period in which to address the alleged misconduct. TERM AS TO NOTICE REQUIRED TO TERMINATE THE CONTRACT 10 Whether the written agreement dated 18 June 2001 was an unfair contract? In particular: 10.1 Whether the term as to the period of notice required by the First Respondent to terminate the contract (namely 2 weeks notice) was or became unfair in all the circumstances; 11 Whether, in circumstances where it is found that the Applicant was not guilty of serious and wilful misconduct, the contract was or became an unfair one in respect to the notice required to be given to the Applicant by the First Respondent to terminate the contract, either: 11.1 on the face of clauses 7.2 and 7.3 of the contract; and/or 11.2 as a result of the circumstances of the employment; and/or 11.3 as a result of the First Respondent's conduct in relation to the circumstances of the termination; and/or 11.4 as a result of the First Respondent's conduct in relation to the failure to give the Applicant any notice of termination or make any payment to the Applicant in lieu of such notice; 11.5 And if so, what was a fair term as to notice in all the circumstances; 11.6 Whether the contract was unfair in that it failed to contain a term requiring the First Respondent to provide the Applicant with at least 6 months written notice should the First Respondent wish to terminate the contract or arrangement; 11.7 Whether the contract was unfair in that it failed to contain a term requiring the First Respondent to allow the Applicant to work out any notice, so as to enable the Applicant to continue to be able to earn commissions from his work as a salesperson, in circumstances where he had invested considerable time and effort in developing potential listings 12 Whether, as a result of any such unfairness found in the terms of the written agreement the contract should be varied to insert terms as follows: 12.1 The First Respondent shall give to the Applicant 6 months notice of termination of the contract or a payment of 6 months in lieu of notice based on the Applicant's total remuneration package under the arrangement including superannuation, any Commissions, bonuses or incentives paid or payable.

12.2 In circumstances where the First Respondent fails to provide the notice required, or fails to allow the Applicant to work out the notice period, the Applicant shall be entitled to a payment in lieu of notice based upon the following components: 12.2.01.1 Six months base salary - based upon the rate of $ 953.85 per week; 12.2.01.2 Six month motor vehicle allowance - based upon the rate of $10,400 per annum 12.2.01.3 six months commission calculated by reference to the average monthly commission earned by the Applicant in the six months prior to the date of termination; 12.2.01.4 six months Superannuation;

FAILURE TO INCLUDE A TERM REQUIRING THE PAYMENT OF COMMISSION EARNINGS ON TERMINATION OF THE CONTRACT 13 Whether the written agreement dated 18 June 2001 was an unfair contract? In particular in that it failed to include a term or terms requiring the First Respondent to pay to the Applicant on termination Commissions earned by the Applicant prior to the termination but not due and payable until after the date of termination of the contract; 14 Whether the contract should be varied to include terms to the following effect: 14.1 In the event that the Applicant's employment is terminated by the First Respondent, the First Respondent shall pay to the Applicant all Commissions in respect to completed transactions for which the Applicant was the appointed sales person and in respect to which the exchange or settlement of the transaction had been effected prior to the date or termination; 14.2 The payment of such Commissions shall occur whether or not the commission in respect to the completed transaction had been received by the First Respondent either prior to or after the date of termination of the contract; 14.3 The payment of such Commissions shall be made by the First Respondent, whether or not at the time of the termination of the Applicant's employment, the First Respondent had received payment of Commission in respect to the transaction; 14.4 For Commissions where the First Respondent has received payment in respect of a completed transaction prior to the termination of the Applicant's employment, the First respondent shall pay the Commission due to the Applicant on termination of the contract; 14.5 For Commissions where the First Respondent has not received payment in respect of a completed transaction prior to the termination of the Applicant's employment, the First respondent shall pay the Commission due to the Applicant on receipt by it of the Commission in respect to the completed transaction;

FAILURE TO INCLUDE TERMS REQUIRING THE PAYMENT OF OUTSTANDING SALARY, SUPERANNUATION AND LEAVE ENTITLEMENT ON TERMINATION OF THE CONTRACT

15 Whether the written agreement dated 18 June 2001 was an unfair contract? In particular in that it failed to include a term or terms requiring the First Respondent to pay to the Applicant on termination outstanding salary, superannuation and leave entitlements accrued but unpaid to the Applicant prior to the termination but not due and payable until after the date of termination of the contract; 16 Whether the contract should be varied to include terms to the following effect: 16.1 Upon termination for any reason the First Respondent shall pay to the Applicant all accrued but unpaid salary superannuation and annual leave entitlements.

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