Guirguis v Ten Twelve Pty Ltd & Anor [2012] FMCA 307

INDUSTRIAL LAW - Adverse action - wrongful dismissal - payment of accrued annual leave, outstanding wages, pay in lieu of notice and superannuation contributions - provision of pay slips and written notice of termination - keeping of records - accessorial liability.

Guirguis v Ten Twelve Pty Ltd & Anor [2012] FMCA 307 | Case summary | Zoe

[45]

In his affidavit sworn on 17 February 2011, Mr Guirguis deposed that he had worked as a chef for twenty-five years. Before working for Ten Twelve he had been employed as an executive chef at Atlantis Seafood Restaurant in North Ryde and later as an executive chef at the Orient Hotel in The Rocks. He deposed that during the course of his work at those two restaurants, he came to know Mr Ayyash.
Mr Guirguis deposed that in May 2010 Mr Ayyash offered him a job as an executive chef at the Aqua Blue restaurant. Mr Guirguis deposed that Mr Ayyash said to him:
- I want you to come and work for me as an executive chef. The future will be fantastic, you will be sitting in the office controlling people and staff and you don't have to worry about working hard. If everything goes well, you will become an owner of this business. I will get you to run everything for me and to control the business for me, inside out; eventually you will become a part owner of the business. I have restaurants in China and if this goes well, you will be looking after China and my restaurant in Brighton.
- ... I will pay you anything you want, I will look after you.
Mr Guirguis deposed that on 1 June 2010 he met Pat Carbone, the president of the fishermen's club, at Rockdale Railway Station and was driven to the club. Mr Guirguis deposed that after he had looked around the restaurant and the club he telephoned Mr Ayyash and advised him that he would accept the job.
Mr Guirguis deposed that in the first week of his employment with Ten Twelve, which he said was 2 June 2010 to 6 June 2010, he attended the restaurant every day to interview staff, plan menus, project the budget and make arrangements to engage suppliers. He deposed that during that week he worked from 9:00am to 5:00pm and worked until 7:00pm on one or two of those days. He said that he also took on the role of the club's food and beverage director.
Mr Guirguis said that about two weeks after he started at the restaurant, Mr Carbone helped him find somewhere to live. He said that he moved to Brighton-Le-Sands about a month after he started working with Ten Twelve and estimated that this happened in about July 2010.
On 7 June 2010 Mr Guirguis had a meeting with Mr Ayyash, Fatima Hammoud, Mr Ayyash's personal assistant, and with the club's manager. During that meeting, Mr Ayyash told him:
- You are our executive chef, you will look after the whole operations and your word will be respected here as a food and beverage director and an executive chef. You will look after everything in regards to functions, bar menu, a la carte restaurant, functions, weddings, advertising, buying and hiring and delegating between us and the Club management.
Mr Guirguis deposed that he told Mr Ayyash that he needed a computer, an office, a "bundy card" and that he needed every employee to get a pay slip, a TFN declaration form to fill in and a letter of employment. Mr Ayyash responded that Ms Hammoud and his accountant would deal with those issues.
Mr Guirguis deposed that afterwards he met with Mr Ayyash alone and had the following conversation with him:
- Mr Guirguis: I would like to earn $1,200 clear in the hand per week as it is a very large operation and a lot of hours and a lot of effort has to be put in. This makes $80,000 a year.
- Mr Ayyash: No worries at all, I will pay you that money, I will put you on the book for the $80,000 a year and also I will give you a bonus and a part share of the business, you will never ever regret and you will be very successful with me. Eventually you will look after all my food outlets, Sydney and China.
Mr Guirguis deposed that later that day Mr Ayyash approached him and they had the following conversation:
- Mr Ayyash: I could pay you $40,000 on the books and the other $40,000 plus the bonus can be paid cash in the hand so you don't have to pay tax on it and it works better for you.
- Mr Guirguis: I don't think it's a good idea.
- Mr Ayyash: Think about it. At the end of the financial year you will become a winner and you don't have to pay any tax.
- Mr Guirguis: No, I just want to go the same way I have worked for the past ten years, I want everything on the books. There is no other way.

[47]

Mr Guirguis deposed that from 7 June 2010 to 14 June 2010 he undertook preparations to get the restaurant ready for opening and also cooked and supervised staff as the kitchen was already open for bar orders and functions. Amongst other things, he finalised the menu planning, did the budget planning for staff and food costs and negotiated with the club on functions and food costs for event nights. He estimated that he undertook eighty-five hours of work during this period. Mr Guirguis deposed that after the restaurant opened for trading on 14 June 2010 and for the duration of his employment with Ten Twelve, he worked from 10:00am to 5:00pm on Mondays and from 10:00am to 11:00pm the rest of the week, with a break of half an hour to an hour between 4:00pm and 5:00pm. He deposed that neither Mr Ayyash nor Ms Hammoud asked him to record his hours of work or provided him with a system of recording his hours of work.
Mr Guirguis deposed that on or around 6 June 2010 he left his completed TFN declaration form, and the TFN declarations of the other employees, on Ms Hammoud's desk and told her that he had done so.
Mr Guirguis deposed that during the course of his employment with Ten Twelve, employees and suppliers of the company were being paid in cash from the takings. He observed Ms Hammoud paying employees and delivery drivers in cash from the till. He also deposed to a conversation he had with her on 28 June 2010 when she said to him:
- You have to pay the kitchen hand and come [sic] chef from the takings from last night.
Mr Guirguis said that he was not happy to be paid in cash. He said that he was afraid to carry cash at night because he did not drive. Mr Guirguis deposed that on or around 1 July 2010 he spoke to Ms Hammoud and told her that he needed a pay slip, electronic payment of his salary into his account and a letter of employment. He also said that the rest of the staff were in a similar situation and it needed to be fixed. Ms Hammoud told him that she would see Ten Twelve's accountant.
Mr Guirguis deposed that on 20 July 2010 he repeated to Mr Ayyash his concerns about pay slips, letters of employment and the payment of staff and suppliers in cash. In that conversation Mr Guirguis also raised his concern that the restaurant was selling alcohol without a liquor licence as this could have severe consequences for the restaurant and for his (Mr Guirguis's) career. Mr Guirguis deposed that Mr Ayyash responded:
- I don't care, this is my business and I am a very important man in this Club, without me, they will close the door tomorrow. On this assumption I can do whatever I like to please and its my way, nobody else. Anybody trying to whisper or talk behind my back, I will cut him to pieces and they will be finished forever.
On 28 July 2010 Mr Guirguis wrote to Ten Twelve providing his updated bank details in a bid to make it clear that he no longer wished to be paid in cash but preferred to be paid by EFT. Mr Guirguis deposed that until 28 July 2010 Ms Hammoud paid him from the takings at the end of his Wednesday shift. He said that his pay was never regular and that he was often underpaid; he was paid his agreed wage of $1,200 net per week on only four occasions and on other weeks he was paid between $500 and $850 net. On the occasions when he was underpaid Ms Hammoud would give reasons such as that there was no money or that there were problems with the business.
In July 2010 an officer from the Fair Work Ombudsman ("FWO") came to the restaurant and interviewed the employees who were working in the kitchen and restaurant on that day, including Mr Guirguis. Mr Guirguis told the officer that he had completed a TFN declaration but had never received any pay slips. After the FWO visit Mr Guirguis and one of the staff obtained copies of TFN declarations which Mr Guirguis then supplied to the staff. He said that everybody filled them in and put them in the office, some giving them to Ms Hammoud and some giving them to him, but they just sat there untouched.
Mr Guirguis denied Ms Hammoud's statement in her affidavit that she had asked him for a completed TFN declaration form. He said that he gave her the proper details including his superannuation details, leaving them in the office. He said that he spoke endlessly to the business's accountant and to Ms Hammoud to the effect that everyone in the kitchen and on the floor should be given weekly pay slips which specified superannuation and tax.
Mr Guirguis deposed that on 2 August 2010 Mr Ayyash telephoned him and told him that he was having a meeting with the FWO and the accountant and that everything in relation to payroll would be fixed.
Mr Guirguis deposed that after the FWO investigation nothing changed; no pay slips were issued to staff and everyone continued to be paid from the takings. He also deposed that he began to experience difficulties getting supplies because the suppliers were not being paid.
On 14 August 2010 Mr Guirguis approached Mr Carbone and asked him to call the accountant so that he could sort out the payroll issue which Mr Carbone did in the presence of Mr Guirguis.
Mr Guirguis deposed that on Sunday 22 August 2010 he contacted Mr Ayyash and arranged a meeting for later that night. Also present at the meeting was the club's new operations manager. At that meeting, amongst other things, Mr Guirguis asked Mr Ayyash that all the employees receive weekly pay slips highlighting their entitlements, that they be paid electronically and not in cash, that the restaurant stop selling alcohol without a liquor licence and that the club respect his decisions on functions and food as he was the food and beverage director. Mr Guirguis deposed that Mr Ayyash went very quiet, played with his mobile phone during the conversation and eventually stood up and walked away.
At that meeting an issue was raised that the restaurant should be friendly and accessible. Mr Guirguis said that the restaurant predominately provided an a la carte service with bistro food available at the bar. He said that the restaurant's presentation did not meet the club's expectations. In his affidavit sworn 13 April 2011 Mr Guirguis deposed that although he was the executive chef, he had limited control over pricing of menu items; he would prepare the menu and the costings, but Mr Ayyash would increase the prices without consulting him. In that affidavit he also deposed that he was aware that there had been complaints about the restaurant prices but in his cross-examination he said it was never suggested to him that the club thought that the prices were too high. Mr Guirguis said that a conversation deposed to by Mr Ayyash, to the effect that he had spoken to Mr Guirguis about the club's concerns in relation to the restaurant's menu and prices, did not take place. He also denied having had other conversations to that effect.
Mr Guirguis deposed to having said to Mr Ayyash at some time:
- It is imperative that the people in the bistro, ordering bistro food, a hamburger or fish and chips, they should be able to dine in the restaurant without any segregation. It is imperative to create a simple menu with a simple environment, without no intimidations and signage to say this area is fine dining.

[49]

When it was put to Mr Guirguis that at the meeting on 22 August 2010 it was said that the menu had to be simpler and that he had refused to comply, he said that he had been prepared to do this but Mr Ayyash did not want to because he did not want the restaurant to change.
Mr Guirguis deposed that after the 22 August 2010 meeting he went home and sent a text message to Ms Hammoud asking her to telephone him. He deposed that when she telephoned him a short time later, the following conversation took place:
- Ms Hammoud: You will not be working in the restaurant any longer. This is Sam's decision and he feel [sic] that it is not working out between you and him and the decision has been made from Sam as a business decision.
- Mr Guirguis: How am I going to get all of my pay? I would like to discuss my pay tomorrow on Monday and I will endeavour to sit down with you and tell you all the bookings that I have taken and also I will let you know what my entitlements are.
- Ms Hammoud: That's fine but you have to give us a week notice.
- Mr Guirguis: Why should I give you a week's notice when I have not been paid for the last three weeks.
- Ms Hammoud: Speak to Sam.
Mr Guirguis denied receiving an SMS to the effect of the one referred to in para.17 of Ms Hammoud's affidavit, namely:
- Sam ... has asked me to advise you that you are no longer required to work at the restaurant, things have gone too far and not working out, Sam is your friend he has promised to help you find a job somewhere else, he has given you two week's notice.
Mr Guirguis said that the next day, Monday, he received an email from Ms Hammoud but he could not bear it anymore. He said that he spoke to her and asked for his entitlements. He said that he told her that he did not want to return to work because he was owed salary but would like to come in to discuss the entitlements he was owed. He said that Ms Hammoud said in her email to him that he was not owed money and that he was not entitled to any payment.
On the day he left, Mr Guirguis asked Mr Carbone to drive him home and he took with him his tools of trade as well as envelopes containing cash which were in the office. He said that he did not want to leave them there as there was no safe. He said that he used to put the envelopes in the side pocket of his tool kit and that, by way of security, there was a camera in the club which, impliedly, would record him doing this.
Mr Guirguis deposed that on Monday 23 August 2010 Mr Ayyash called him and said:
- I will cut you to pieces and nobody will find anything about you. You don't know who I am or what I am capable of. You are a loser. I will make you regret this for the rest of your life and I will make sure you will always have to look behind your back.
In his affidavit sworn on 17 February 2011 Mr Guirguis deposed that on Tuesday 24 August 2010 he asked Mr Ayyash to telephone him in relation to the three envelopes containing staff wages that Mr Guirguis had in his possession and which he wanted to return. Mr Guirguis deposed that Mr Ayyash then telephoned and threatened him.
Mr Guirguis deposed that later that night he contacted Mr Carbone and asked him to come to his house to collect the three envelopes as he was afraid to go to the club in case Mr Ayyash was there. In cross-examination Mr Guirguis said that he rang Mr Ayyash who was very angry and rude, saying that he knew where Mr Guirguis lived and would cut him so he could no longer cook. Mr Guirguis said that he then rang Mr Carbone and said that he was not going back because he was afraid of Mr Ayyash who would not talk to him properly to resolve the matter amicably. Mr Guirguis said that he told Mr Carbone that he had three envelopes which might have been staff wages and that he would like to receive his entitlements and a photo which he had left behind. He said that Mr Carbone came to his home and collected the envelopes. Mr Guirguis annexed to his second affidavit a copy of the receipt for the three envelopes collected by Mr Carbone. It was dated 24 August 2010 and recorded that the envelopes were dated "18/8/2010 / 19/8/2010 / 22/8/2010".
A week later, Mr Ayyash came to Mr Guirguis's home. Mr Guirguis said that Mr Ayyash was aggressive and assaulted him.
Mr Guirguis deposed that after his employment was terminated he did not receive any further payments from Ten Twelve. He also did not receive his final week's wages, any payment in lieu of notice or any money in respect of annual leave. He said that he was also owed two weeks' salary from the first two weeks he worked for Ten Twelve.
Mr Guirguis said that when he was working for Ten Twelve he had four employees at any one time in the kitchen. He also had one afternoon waiter and one evening waiter and two waiters on weekends but he had no control over the waiting staff in the restaurant. He said that there had not really been a high turnover of staff in the kitchen and the waiting staff was not his responsibility. Mr Guirguis deposed that from 2 June 2010 to 28 July 2010, approximately seven or eight employees resigned.
Mr Guirguis deposed that he was aware of three complaints being made against him by staff members but conceded that there may have been others of which he was not aware. He denied that he terminated the employment of thirty employees, saying that he only terminated two employees. Mr Guirguis conceded that there were occasions when he yelled at staff, saying that this was the result of working in a kitchen which is a "stressful and highly strung environment" but he denied that he had ever thrown anything at a staff member or had used foul language.
Mr Guirguis denied that he had ever been rude to customers, stating that he would not have conducted himself in such a manner. He also said that he had not been told that he had been rude to customers.
Mr Guirguis denied ordering too much food and supplies or throwing away food that he had ordered. He admitted using his own suppliers because he trusted them but denied that Ms Hammoud or Mr Ayyash had ever told him to use other suppliers. He said that Mr Ayyash had not introduced him to any. Mr Guirguis said that he did not recall Mr Ayyash saying to him, as Mr Ayyash deposed at para.28 of his affidavit:
- I want you to use the suppliers that I introduced you to in June. The supplier [sic] you use are too expensive. Furthermore, you are ordering too much food and because of the low customer numbers we are having to throw most of it out.
Mr Guirguis also said that the respondents sold their own alcohol which they brought in through the back door and that they required the staff to wear club T-shirts so that the licensing police would be misled.

[50]

In his affidavit sworn on 26 March 2011 Mr Ayyash deposed that he was the sole director, shareholder and secretary of Ten Twelve. He deposed that in April 2010 Ten Twelve opened a restaurant called Aqua Blue in the Armatures [sic] Fishermans [sic] Club at Brighton-Le-Sands and in about mid-May 2010 he asked Mr Guirguis whether he would be interested in being its executive chef. He deposed that he told Mr Guirguis:
- The role will require you to manage the entire restaurant, hire and terminate staff, staff rostering, designed [sic] menus, manage customer relations, and purchase goods from suppliers. The restaurant also has an agreement with the club to supply catering services to club functions. I will pay you $1,200 per week gross inclusive of superannuation and before tax.
At a meeting on 7 June 2010, Mr Guirguis accepted the offer.
Mr Ayyash deposed that at no stage during the 7 June 2010 meeting did he offer to pay Mr Guirguis $1,200 per week "clear in hand" or $80,000 p.a. He deposed that he would not have offered Mr Guirguis $80,000 p.a. because he had not employed him before and was unsure how he would perform in the role. Moreover, given that the restaurant seated a maximum of 80 people and the club only had 350 members, the whole operation was relatively small.
Mr Ayyash deposed that he had not offered to pay Mr Guirguis $40,000 "on the books" and $40,000 plus bonuses "off the books". He said that all his employees were "on the books" and taxed in the ordinary way. He did not tell Mr Guirguis that he would receive a part share in the business or a bonus.
Mr Ayyash said that Mr Guirguis wanted to be paid cash because he was not good with computers but, in any event, whatever Mr Guirguis wanted was dealt with by Mr Ayyash's personal assistant, Ms Hammoud, and the accountant. Mr Ayyash said that Mr Guirguis never spoke to him about superannuation, pay slips, annual leave and entitlements; he dealt with Ms Hammoud in relation to such issues. He said that Mr Guirguis did not raise the question of electronic payments. Mr Ayyash said that he did not get involved in the payment of workers.
Mr Ayyash deposed that Mr Guirguis was responsible for the day-to-day running of the restaurant while Ms Hammoud took care of payroll and general accounting duties. His own role at Aqua Blue was fairly limited as he had other businesses to run. Mr Ayyash agreed that Mr Guirguis hired and fired staff and said that he had seen at least eighteen faces passing through the business during the relevant time although there could have been as many as fifty or even more individual staff members because he was overseas for three weeks. Mr Ayyash said that Mr Guirguis used to sack chefs because they complained about him.
Mr Ayyash deposed that in July 2010 he spoke to Mr Guirguis about complaints he had received from a number of staff about his behaviour, namely, that he would swear and abuse them and that he had thrown objects at them. He deposed that Mr Guirguis said that he would not act in that way again.
Mr Ayyash deposed that Ms Hammoud also advised him of an incident in July 2010 when Mr Guirguis had been rude to a customer in front of other patrons.
Mr Ayyash deposed that he had received complaints about Mr Guirguis from club management. In early July 2010 he had a conversation with the club's president to the following effect:
- Mr Carbone: The club is getting too many complaints from customers about the food from your restaurant, it's too expensive and the proportions [sic] are too small. Some members don't feel welcome in the restaurant. The restaurant is too formal for the club and I want you to turn it into a bistro. I've tried to talk to Michael (the Applicant) about this but he tells me that it's none of my business how he runs the restaurant and he will run it the way he wants to.
- Mr Ayyash: I will talk to Michael (the Applicant) about this.
Mr Ayyash deposed that he spoke to Mr Guirguis about Mr Carbone's concerns and asked him to work with club management to get things right. He deposed that Mr Guirguis's response was:
- Pat shouldn't be telling us how to run the restaurant.
Mr Ayyash deposed that he had a number of similar conversations with Mr Guirguis in July and August 2010 but that after each conversation Mr Guirguis failed to implement any of Mr Carbone's requests. Mr Ayyash disagreed with the proposition that changing the restaurant to a bistro was Mr Guirguis's idea saying that, in fact, Mr Guirguis refused to change it to a bistro.
Mr Ayyash deposed that Mr Guirguis was ordering in excess of $8,000 worth of supplies per week, half of which were not used and had to be thrown out. Mr Ayyash said that the statement in his affidavit that the applicant had been ordering in excess of $8,000 worth of supplies per week came from an inspection of the business records after Mr Guirguis had been dismissed.
Mr Ayyash said that he operated sixteen restaurants and they had a number of suppliers who could have provided deals better than those which Mr Guirguis had negotiated. In June 2010 Mr Ayyash instructed Ms Hammoud to arrange a meeting between Mr Guirguis and suppliers whom Mr Ayyash had used previously. He then instructed Ms Hammoud to tell Mr Guirguis that he was to use those suppliers as they were much cheaper. Mr Ayyash deposed that on a number of occasions in July and August 2010 he also instructed Mr Guirguis to the following effect:
- ... I want you to use the suppliers that I introduced you to in June. The supplier [sic] you use are too expensive. Furthermore, you are ordering too much food and because of the low customer numbers we are having to throw most of it out.

[52]

When taken to the receipt for the supply of chops which was annexed to his affidavit, Mr Ayyash conceded that the dates of the invoices recorded on that statement came from October 2010 and not from the period when Mr Guirguis was employed with Ten Twelve. He was also taken to the statement of claim from an oyster supplier which was annexed to his affidavit and to the defence which was subsequently filed in response to that statement of claim which, amongst other things, disputed the claim being made by the oyster suppliers. Mr Ayyash said that he never received the goods and was defending the claim on that basis.
Mr Ayyash deposed that as the number of patrons continued to decline the club became increasingly critical of the restaurant's performance. On 22 August 2010 he and Mr Guirguis were called to a meeting with Mr Carbone and the club's general manager during which the following conversation took place:
- Mr Carbone: We are getting a lot of complaints about the restaurant food being too expensive, the proportions [sic] being too small and our members feel that the restaurant is not for them. All we want is for you to provide a simple menu; fish and chips; burgers and other food you expect in a club at a reasonable price. We want you to run the restaurant as a bistro.
  - Michael (the Applicant) you don't appear to be getting on with your staff and you've been sacking too many of them.
- Mr Guirguis: I want to continue operating it as a restaurant. I don't want to run a bistro. You can't tell us how to run the restaurant that's our job.
- Mr Ayyash: Michael (the Applicant) you need to do what Pat is telling you to do.
- Mr Guirguis: I won't want to run the premises as a bistro.
Mr Ayyash denied that at the 22 August 2010 meeting Mr Guirguis raised issues to do with superannuation, pay slips, annual leave or entitlements. Also, although Mr Guirguis had pressured Mr Ayyash to obtain a liquor licence for the restaurant as he did not like the club staff, wearing club uniforms, serving alcohol in the restaurant, Mr Ayyash said that the sale of alcohol was not raised on 22 August 2012.
Mr Ayyash deposed that following that meeting he decided that Mr Guirguis was no longer suitable for the role of executive chef. He decided to terminate Mr Guirguis's employment because he had been rude to customers and staff, had over-ordered supplies, had used suppliers who were too expensive, had refused to follow directions to use cheaper suppliers and had refused to co-operate with the club's requests to change the menu. Mr Ayyash said that he could not dismiss Mr Guirguis personally because he was so hurt and upset that he could not call him. Mr Ayyash deposed that he instructed Ms Hammoud to send Mr Guirguis a text message notifying him that his employment had been terminated. He deposed that Mr Guirguis had been paid all his wages and entitlements.
Mr Ayyash said that although he tried to be supportive of Mr Guirguis in the context of his dismissal, later he was willing to call him a dog and a thief because he discovered that Mr Guirguis had been stealing from him. Mr Ayyash said that Mr Guirguis had taken six envelopes from the premises and, through Mr Carbone, had returned only three. Mr Ayyash said that Mr Guirguis had taken home a week's income for the business.
Although Mr Ayyash remembered that the FWO had visited the business and had said that he had to regularise wage payments to the staff, he said that the FWO officer had not spoken to him or to his personal assistant but, rather, to his accountant and to the club. He was then taken to an FWO site visit document dated 21 July 2010 and acknowledged that he signed it.

[55]

In cross-examination Ms Hammoud said that as Mr Guirguis did not provide her with TFN and superannuation fund information, she included his superannuation contributions in his weekly wages. She said that Mr Ayyash told her to pay Mr Guirguis $1,200 per week and to deal with the superannuation issue later. She never paid any money into Mr Guirguis's superannuation fund because he never gave her the details. She conceded that she knew about default superannuation funds.
Ms Hammoud also deposed that tax was not deducted from Mr Guirguis's wages as he refused to return a completed TFN declaration form. However, in cross-examination she said that tax was paid on the full $1,200 paid to Mr Guirguis every week, notwithstanding that some comprised an amount of superannuation. She said that she thought they had to deduct tax at something like 47% "because he didn't provide us with the details".
Ms Hammoud said that Mr Guirguis did not ask to be paid electronically but said, rather, that cash payments would suit him better, mentioning something about child support. In relation to pay slips, Ms Hammoud said that the business did not give employees pay slips as a matter of course although they would do so were this requested. She deposed that Mr Guirguis had never requested pay slips. She said that she did not know that pay slips had to be supplied.
Ms Hammoud said that she did not recall Mr Guirguis asking for the introduction of timesheets although she said that Mr Ayyash believed that a bundy clock was a good idea and they obtained one.
Ms Hammoud said that Mr Guirguis avoided speaking to her about superannuation although every time she went to the restaurant they had a conversation about something. Ms Hammoud said that Mr Guirguis had never complained about his pay being irregular, saying that if he had not received his money every week he would have complained both to her and to Mr Carbone. She said he complained to Mr Carbone about everything.
Ms Hammoud deposed that she received numerous complaints from other employees about Mr Guirguis's conduct. Staff complained that he was rude, would shout and swear at them and sometimes throw food and equipment at them.
In July 2010 she and Mr Ayyash reviewed the invoices from the various companies used by Mr Guirguis to supply food to the restaurant. Ms Hammoud deposed that Mr Ayyash then provided her with the names of cheaper suppliers and instructed her to arrange a meeting between those suppliers and Mr Guirguis. She deposed that that meeting took place in June 2010 but Mr Guirguis continued to use his own suppliers. Ms Hammoud said that she was paying the suppliers but was struggling.
Ms Hammoud gave as an example of Mr Guirguis's extravagance the fact that in one month he spent $4,000 on linen and had so much of it that the cupboards looked like a hospital. It was brought to her attention that he was ordering things which the restaurant did not need and that food had to be thrown out. Ms Hammoud said that she had been of the view that the business was over-ordering and that Mr Carbone had shared this opinion as had the club's general manager and its bar staff.
Ms Hammoud deposed that on 22 August 2010 she received a telephone call from Mr Ayyash who said to her:
- I want to terminate Michael's (the Applicant) employment, I've just had a meeting with the President (Pat Carbone) and secretary (Peter John) of the club (Armatures [sic] Fishermans [sic] Club) and Michael (the Applicant). All Michael did was accuse me of doing the wrong thing by the club and selling alcohol without licence. The club is also receiving complaints about the quality of food coming from the restaurant and rudeness by Michael. Michael continues to use suppliers who are too expensive and does not get on with staff at the restaurant and is rude to customers. I cannot have this man (the Applicant) ruined [sic] my business, please send him a message that his employment is terminated with one [sic] week's notice. Please make sure that the message is polite and explain to him that he is my friend and I will help him find another job.
Later that day, Ms Hammoud sent a text message to Mr Guirguis terminating his employment with two weeks' notice.
Subsequently, Mr Carbone told her that Mr Guirguis would not be coming back at all so she rang the Department of Industrial Relations and asked about Ten Twelve's obligations to make further payments to him. She said that she was told that they had the right to withhold a certain amount of pay.
It was around this time that Mr Guirguis returned to the kitchen, took his tools as well as things which did not belong to him, including the takings from the business which, Ms Hammoud said, never left the premises until they were taken to be banked once a week on Tuesdays. She said that Mr Guirguis said that he was not going to return the money he had taken until he was paid. Ms Hammoud said that the business was open six days per week and each day's takings were placed in a separate envelope which meant that Mr Guirguis had taken six envelopes not just the three which he later returned.
Ms Hammoud said that they did not pay Mr Guirguis his annual leave entitlements, or its associated loading, because he had not returned three of the six envelopes. He was also not given any pay in lieu of notice because he had not worked out his notice. In her affidavit, Ms Hammoud deposed that Mr Guirguis had been paid all his wages and entitlements.
When taken to the defence filed partly on her behalf in relation to the claim made against Ten Twelve by an oyster supplier, Ms Hammoud said that Ten Twelve had never seen half of the supplies which had allegedly been provided. She said that the defence they were mounting to the oyster supplier's claims was that they had not received everything which was alleged to have been delivered.

[61]

It appears to me to be no coincidence that Mr Guirguis took money which did not belong to him when his evidence was that on the previous day when he spoke to Ms Hammoud she failed to respond substantively to his inquiry about moneys he said were due to him and that on the day when he took the money she said to him that he was not owed anything and was not entitled to any payment.
Additionally, Mr Guirguis's evidence about the market positioning of the restaurant was confusing. As revealed by the summary of the evidence set out above at [46], he gave conflicting evidence concerning his knowledge of the acceptability to the club and its patrons of the prices which the restaurant was charging. Also, in his affidavit in reply he attempted to deal with this issue by saying that although he would prepare the menu and costings Mr Ayyash would increase prices without consulting him while in his evidence in chief he had stressed his managerial control over issues concerning food and gave no hint of any interference by Mr Ayyash in such matters.
Mr Guirguis's evidence was also to the effect that he had been willing to change the format of the restaurant to a bistro but that Mr Ayyash had been reluctant to take this step. Mr Carbone's evidence appears to suggest that this was not the case and that although Mr Guirguis and Mr Ayyash were initially reluctant to make that change, Mr Ayyash was warming to the idea while Mr Guirguis remained to be convinced.
Another confusing aspect of the evidence was how Mr Guirguis was informed of his dismissal and when he was actually advised. Mr Guirguis said that Ms Hammoud telephoned him after the meeting on 22 August 2010 to tell him that he was dismissed and, somewhat incongruously, that he had to give the restaurant one week's notice. In cross-examination he said that the following day he received an email from her in which she said that he was not owed money and was entitled to no payment. This evidence had not been included in either of his affidavits. However, Mr Carbone's evidence was that Mr Guirguis said that Ms Hammoud had sent him a text message and that he showed it to him. Mr Carbone also said that, on what must have been Monday 23 August 2010, Mr Ayyash said that he had given Mr Guirguis two weeks' notice and showed him the text message which had been sent. Mr Guirguis denied having received such a text message. These matters suggest that Mr Guirguis's recollection of details is not reliable.
Mr Guirguis described Mr Ayyash's behaviour from 23 August 2010 as threatening and intimidating. I am willing to accept that something of the sort did occur and although not to be condoned or reflecting well on Mr Ayyash, it is conduct which might have occurred if Mr Guirguis had taken envelopes of money which he should not have taken. The vehemence which Mr Guirguis describes also tends to support Mr Ayyash's claim that Mr Guirguis had taken six envelopes but only returned three.
As to Mr Ayyash, as part of what seemed to be a studied distancing of himself from the day-to-day operation of the restaurant, he claimed to have had nothing to do with the FWO visits and yet the FWO form which was exhibit C bore his signature, indicating that he had participated in the site visit on 21 July 2010. I was also not impressed by the evidence adduced by Mr Ayyash concerning the alleged over-ordering by Mr Guirguis in that it relied on a supplier's statement which plainly had no relationship to the period of Mr Guirguis's employment and on debt recovery proceedings which were being defended on the basis that the goods in respect of which payment was sought were alleged by Mr Ayyash never to have been supplied.
As to Ms Hammoud, she rejected any suggestion that Mr Guirguis had ever provided her with a TFN declaration and conceded that if he had not done so then tax at 47% would have had to be deducted from his pay. However, the payroll records produced on subpoena which became exhibit B indicate that from the end of June 2010 to mid-August 2010 Mr Guirguis's base wage was $1,597 per week and that the PAYG withholding amount was $397, which suggests tax was deducted at ordinary marginal rates and not at an overall 47% or something similar. Either Mr Guirguis had provided a TFN declaration which permitted PAYG instalments to be deducted in the usual way, or tax had been withheld at the standard rates even though such declaration had not been provided or the payroll records which had a print date of 16 February 2011 were not genuine. Whichever was the case, the documentary record contradicts part of Ms Hammoud's evidence.

[69]

It was not suggested that anybody other than Mr Ayyash made the decision to dismiss Mr Guirguis.
In relation to the complaints said to have been made before the 22 August 2010 meeting, much turns on Mr Guirguis's assertions in his evidence that he raised the issues in question with Mr Ayyash. To the extent that his further amended statement of claim alleges that he raised issues with Ten Twelve's accountant, no evidence was adduced to support this allegation. Further, even if Mr Guirguis had communicated such complaints to Ten Twelve's accountant, there was no evidence that these had been conveyed to Mr Ayyash.
Mr Ayyash made much of being too important to concern himself with the day-to-day running of the restaurant although he admitted to taking a greater interest when it was apparent, on his allegation, that the business was losing money. Although Mr Ayyash's evidence was affected by bravado, I nevertheless accept that he delegated considerable responsibility to Ms Hammoud and that he did have little operational involvement in the restaurant. In this regard, I note that Mr Carbone said that Mr Ayyash was hardly ever at the restaurant. In particular, I accept that the minutiae of the payment to staff of their wages and entitlements was not a matter which unduly concerned Mr Ayyash. I also accept that Ms Hammoud looked after the restaurant's payroll and observe that there was no evidence that she ever told Mr Ayyash of the complaints which Mr Guirguis is said to have made to her.
Mr Guirguis's evidence was to the effect that Mr Ayyash wanted some of his wages payments to be on an informal basis and he implicitly invited the Court to conclude that Mr Ayyash had an interest in paying wages in cash and in failing to provide pay slips evidencing wages paid. Such an inference would also require other staff members to have been paid on the same basis in order for the implied fraud on the revenue to have had any real value to the respondents. However, it was not suggested that any relevant action was taken by the FWO, whose site visit report relevantly only referred to underpayments by reference to minimum engagement after 7:00pm, to penalty rates, to broken shift penalties and to meal breaks. Even though Mr Guirguis was interviewed by the FWO inspector it appears that nothing he said caused the FWO to record that not all wages paid were properly accounted for or that Mr Guirguis had been underpaid. It can be assumed that the FWO inspected Ten Twelve's pay records and that although those records evidenced the underpayments referred to in the FWO report, they were otherwise sufficient and compliant. I infer that the records produced on subpoena, which for reasons given below I accept as accurate if incomplete, contained at least some of the information which was contained in the records inspected by the FWO.
I reject Mr Guirguis's evidence that Ms Hammoud paid suppliers from the till. On his own evidence in his affidavit in reply Ms Hammoud only came to the restaurant at night and at most once or twice a week. It is difficult to reconcile these two assertions and in light of the evidence as a whole I am inclined to conclude that Ms Hammoud was not present when suppliers delivered goods.
I also reject the proposition that Mr Guirguis complained about the alcohol sales during the course of the meeting on 22 August 2010. In this connection, I consider it quite unlikely, as Mr Guirguis's evidence would implicitly suggest, that while he was essentially alone most evenings running the restaurant in the absence of Ms Hammoud and Mr Ayyash he permitted alcohol to be sold on an unlawful basis, and against his wishes, in circumstances where it can be assumed that alcohol could have been obtained from, or supplied by, the club's bar and bar staff with no difficulty. Further, it can be assumed that it would have been a matter of grave concern to the club if its alcohol sales were being reduced by illicit activities on the part of Aqua Blue, particularly if persons who were not its employees were wearing its uniform. I have no doubt that if, at any point, Mr Guirguis had made complaints of such conduct to the club's manager or Mr Carbone, Mr Carbone would have been aware of them and recalled them.
These aspects of Mr Guirguis's allegations concerning the discussion on 22 August 2010 having been rejected, the only remaining matter on the list of things he said he raised on that occasion was his authority as the food and beverage director. He did not identify why this was a matter he needed to call in Mr Ayyash and the club's manager to discuss on a Sunday evening and it seems unlikely that he did. Indeed, it is unlikely that Mr Guirguis, as he alleges, called a Sunday night meeting involving his employer and the club's manager in order that he could complain about this and the other matters to which he has referred. More plausible is Mr Ayyash's recollection that it was the club which called the meeting to complain about an expensive restaurant being inappropriate to the club's membership and needs. Indeed, Mr Ayyash's recollection of Mr Guirguis's reluctance to change the restaurant to a bistro-style operation echoes the latter's complaints that the club was not respecting his decisions as the food and beverage manager. This accords with what little recollection Mr Carbone had of the meetings he had with Mr Guirguis and Mr Ayyash concerning the club's expectations of the type of food which would be served and its desire for cheaper menu options.
Consequently, notwithstanding that Mr Carbone appeared to have no recollection of the meeting of 22 August 2010, I reject Mr Guirguis's version of events of that evening and prefer that of Mr Ayyash. In reaching this conclusion I have had regard to what Ms Hammoud deposed Mr Ayyash said after that meeting but overall prefer Mr Ayyash's evidence concerning the meeting on 22 August 2010 including his evidence that the issue of unlicensed alcohol sales was not raised on that evening.
Further, I accept that Mr Guirguis was a difficult man with whom to work. In this regard, the complaints or observations referred to by Mr Ayyash and Ms Hammoud in their evidence were relevantly corroborated, in substance if not in detail, by Mr Carbone. His observations that Mr Guirguis screamed at staff, that he had a high staff turnover because he sacked people with whom he was not happy, that he argued with customers and that, on occasions, his behaviour was "too much" paints an unattractive picture and one which, it might be assumed, did not favourably impress Mr Ayyash who was, after all, only a licensee in the club's premises.
The confirmation of this sort of behaviour also leads me to accept the evidence of Ms Hammoud that Mr Guirguis was wasteful in his ordering. Her evidence on this point appeared to me to be coherent and truthful, particularly when she described the restaurant's linen store as being "like a hospital". This simile was spontaneously offered in cross-examination and struck me as completely genuine. Additionally, although I do have some difficulties with the evidence of Mr Ayyash and Ms Hammoud, I accept the evidence they gave concerning the attempts which were made to convince Mr Guirguis to use different and cheaper suppliers. In doing so, I reject Mr Guirguis's evidence to the contrary.
In sum, I conclude that the complaints which Mr Guirguis made, to the extent that they were made at all, have not been shown to have been communicated to Mr Ayyash. In any event, I do not accept that Mr Guirguis complained about "being put on the books" or about the unlawful service of alcohol by the restaurant, even if he did say that he wanted the restaurant to have its own liquor licence. Nor, even if his alleged requests for his salary to be paid by EFT and his complaints or enquiries about pay slips and superannuation contributions had found their way to Mr Ayyash, do I conclude that such matters formed a part of Mr Ayyash's decision to dismiss him. I accept that the reason Mr Guirguis was dismissed was that he was demanding, wilful and possibly embarrassing and had not made the restaurant the success which Mr Ayyash wanted it to be. I accept that Mr Ayyash's decision was an economic one and unrelated to whatever complaints Mr Guirguis might have made about the various things to which he has referred.

[72]

It is to be observed that the payroll records which are part of exhibit B and are entitled "Payroll Journal 1/06/2010 to 30/08/2010", start at the week ending 22 June 2010 and conclude with the week ending 17 August 2010. No attempt was made to explain why those records made no reference to payment of the applicant for work done between 6 and 15 June 2010 and 18 and 22 August 2010. Neither Mr Ayyash nor Ms Hammoud suggested that the payroll records were deficient in any way.
In the further amended statement of claim Mr Guirguis alleged that he had not been paid salary for the periods 6 June 2010 to 20 June 2010 and 8 August 2010 to 22 August 2010. In response to two subpoenas served on Ten Twelve requiring the production, amongst other things, of documents which would evidence wage payments, PAYG instalments and superannuation contributions relating to Mr Guirguis during the period of his employment with Ten Twelve, the only thing which was produced was the payroll journal. Various excuses were advanced for why a more fulsome answer to the subpoenas had not been made but, notwithstanding those explanations, I conclude that further documents were not produced either because they did not exist or because the respondents made inadequate attempts to comply with the subpoenas. Whichever is the case, the respondents had the opportunity to produce, not only by way of subpoena but also during the course of the hearing, documentary evidence which might have supported their denial of the applicant's allegations concerning his wages, or other evidence which explained why it did not exist. With the exception of the payroll journal, no evidence other than generalised and unsubstantiated assertions by Mr Ayyash and Ms Hammoud were proffered by the respondents in relation to Mr Guirguis's allegation of underpayment of wages.
Although in many respects I have found Mr Guirguis to be an unimpressive witness, in circumstances were he has made a plain allegation which could easily have been refuted by commonplace business records which in large part have not been put before the Court, I am prepared to accept that Mr Guirguis was not paid wages during the period 6 to 15 June 2010 and the period 18 August 2010 to 22 August 2010. Based on the wages he was paid, this amounts to $3,194. Further in this regard, the unexplained failure to adduce evidence from Ten Twelve's accountant assists me to accept with greater confidence Mr Guirguis's evidence on this point.
Moreover, although Ms Hammoud's evidence was that she spoke to the Department of Industrial Relations and was told that certain amounts did not need to be paid to Mr Guirguis, her evidence did not descend into any detail on this point. In particular, she did not say what "pay" she had withheld or the basis upon which she claimed Ten Twelve was entitled to withhold it although it appears that she may have been told that Ten Twelve did not need to pay wages in lieu of notice if Mr Guirguis was walking out. However, her evidence appears to amount to an admission that, on some unexplained basis, amounts were not paid to Mr Guirguis to which he would ordinarily have been entitled.
Although Mr Guirguis's evidence was that the wages he did receive during the time he was employed by Ten Twelve were not regular or consistent, the payroll journal essentially contradicts this, at least in relation to the periods to which it refers. I conclude from the evidence that Ms Hammoud would have known whether the payroll journal was accurate or not and yet she was asked no questions about it. It was put to her that Mr Guirguis complained about his pay not being regular and she rejected that proposition but the accuracy of the records was never put to her. In the circumstances, I am willing to accept their accuracy, as far as they go. Consequently, I do not find that Mr Guirguis was underpaid except in respect of the periods 6 to 15 June 2010 and 18 to 22 August 2010.

[80]

Mr Guirguis alleged that, pursuant to s.550 of the FWA, Mr Ayyash had accessorial liability for Ten Twelve's contraventions of that Act because of his managerial responsibility for the company's actions, his personal knowledge of Ten Twelve's obligations and contraventions, his actual or constructive awareness of his complaints and inquiries, the fact that he directed his dismissal and also on the basis that he directed Ten Twelve not to pay him his annual leave and leave loading upon termination
Section 550 of the FWA is quoted above at [21]. It is drawn in terms very similar to those of s.75B of what was the Trade Practices Act 1974 and is now the Competition and Consumer Act 2010. The latter section has been considered in a number of decisions which provide guidance as to the meaning of the same terms where they are found in s.550(2). Those Trade Practices Act authorities show that in order that a person may be "involved in" a contravention of a civil remedy provision it is necessary to demonstrate that the person in question was a knowing participant in the contravention: Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661 at 668-670.
Section 550(2)(a) of the FWA provides for accessorial liability on the basis that a person has "aided, abetted, counselled or procured" a contravention. That paragraph is identical to s.75B(1)(a) of the Competition and Consumer Act and it can be inferred that they have the same meaning. In Yorke v Lucas it was said that "aided, abetted, counselled or procured" where used in s.75B(1)(a) have the same meaning as in the common law where they designate participation in a crime as a principal in the second degree or as an accessory before the fact. "Aiding" and "abetting" refer to a person who is present at the time of the commission of an offence and "counselling" and "procuring" refer to a person who, although not present at the commission of the offence, is an accessory before the fact: Giorgianni v The Queen [1985] HCA 29; (1985) 156 CLR 473 per Gibbs CJ at 480; Australian Securities & Investments Commission v Australian Investors Forum Pty Ltd (No 2) [2005] NSWSC 267 at [115].
A person counsels a contravention by another if he or she urges its commission, advises its commission or asks that it be committed and procures a contravention if he or she causes it to be committed, persuades the principal to commit it or brings about its commission; there must also be a causal connection between that action and the conduct impugned: Australian Securities & Investments Commission v Somerville [2009] NSWSC 934; (2009) 259 ALR 574 at 588 [41]; Western Australia v Burke (No 3) [2010] WASC 110 at [18]- [19]; see also Truong v R [2004] HCA 10; (2004) 223 CLR 122 at 142 [30] per Gleeson CJ, McHugh and Heydon JJ.
A person is "knowingly concerned" in a contravention if he or she has knowledge of the essential facts constituting the contravention and is an intentional participant in it, the necessary intent being based on knowledge of the essential elements of the contravention: Yorke v Lucas; Australian Competition & Consumer Commission v Giraffe World Australia Pty Ltd [1999] FCA 1161; (1999) 95 FCR 302; Rural Press Ltd v Australian Competition & Consumer Commission [2002] FCAFC 213; (2002) 118 FCR 236; Heydon v NRMA Ltd [2000] NSWCA 374; (2000) 51 NSWLR 1. The accessory need not know that the conduct constituted a contravention: ACCC v Giraffe World at 346 [186]; Rural Press v ACCC at 282-283 [159]-[160]; Heydon v NRMA at 109 [334].
In Australian Competition & Consumer Commission v IMB Group Pty Ltd [2003] FCAFC 17, speaking of s.75B(1)(c), the Full Court of the Federal Court said:
- For a person to be involved in a contravention within the meaning of s.75B(1)(c) of the Act, a person must be an intentional participant in the contravention, the necessary intent being based upon knowledge of the essential elements of the contravention: see Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661 at 670. Thus, while it is not necessary to establish that the individual Respondents had knowledge that there was a contravention of a provision of Pt V of the Act, it is necessary to demonstrate that each individual Respondent had knowledge of each of the essential elements of the contravention.
- In order to establish whether any of the individual Respondents was involved in a contravention, it is necessary to examine the state of mind of each of them separately in relation to each alleged contravention. ...
- It is not necessary to establish any subjective element in relation to a contravention of Pt V of the Act. A contravention may be committed unintentionally. That is to say, a person may contravene a provision of Pt V even though that person does not have knowledge of all of the essential elements that constitute the contravention. However, before any accessorial liability will arise, it is necessary to establish the subjective element of knowledge of each of the essential elements of the contravention. That knowledge may be constructive in the sense that it may be possible to show wilful blindness in relation to the elements of a contravention. However, absent a finding of wilful blindness, it is necessary to establish actual knowledge on the part of a person to whom it is sought to sheet home accessorial liability in respect of a contravention of Pt V. (at [133]-[135])
What these authorities show is that in order for a person to have accessorial liability under s.550(2)(c) of the Act he or she:
- must have knowledge of the essential facts constituting the contravention;
- must be an intentional participant in the contravention based on actual not constructive knowledge of the essential facts constituting the contravention - although constructive knowledge may be sufficient in cases of wilful blindness; and
- need not know that the matters in question constituted a contravention.
By reason of my findings earlier in these reasons, only four of Mr Guirguis's allegations of accessorial liability on the part of Mr Ayyash need to be addressed: Ten Twelve's failure to issue pay slips, its failure to pay his wages for the periods 6 to 15 June 2010 and 18 to 22 August 2010, its failure to pay Mr Guirguis his annual leave entitlements and its failure to pay superannuation contributions. No evidence was adduced which indicated that Mr Ayyash was even aware that pay slips were not provided to Mr Guirguis. Consequently, there is no basis to conclude that he was involved in Ten Twelve's contravention of the FWA in this respect. Similarly, no evidence was adduced which indicated why Mr Guirguis was not paid for one week in June 2010 and another week in August 2010. In particular, no evidence was adduced which indicated that Mr Ayyash knew of this, much less that he was involved. Nor was evidence adduced which suggested anything other than that the decision to withhold Mr Guirguis's accrued annual leave entitlements was Ms Hammoud's. The evidence does not support a conclusion that Mr Ayyash was involved, in any of the ways referred to in s.550(2), in the making of that decision or the taking of that step. As to Ten Twelve's failure to make superannuation contributions, although the evidence supports a conclusion that Mr Ayyash told Ms Hammoud to implement a temporary arrangement involving total payments of $1,200 per week, it does not support a finding that Ms Hammoud was told to not pay Mr Guirguis's superannuation contributions. Relevantly, Ms Hammoud said that Mr Ayyash told her to implement a temporary arrangement and to deal with the superannuation issue later. I do not interpret this to be a direction or the manifestation of an intention that Mr Guirguis be deprived his superannuation entitlements, merely that the resolution of that issue be postponed. Given my acceptance of Mr Ayyash's lack of involvement in the day-to-day running of the restaurant's business, I infer that he did not concern himself further with this issue and left it with Ms Hammoud. As a result, I do not find that he was involved in Ten Twelve's contravention in respect of Mr Guirguis's superannuation entitlements.

At a glance

Court

Decision date

Source

Judgment (83 paragraphs)

Guirguis v Ten Twelve Pty Ltd & Anor [2012] FMCA 307 (23 April 2012)

Guirguis v Ten Twelve Pty Ltd & Anor [2012] FMCA 307 (23 April 2012)

Parties

Legislation Cited (3)

Cases Cited (7)