Mejias v Federal Express

For the applicant 5The evidence in the proceedings was extensive, much of it taken up with the parties seeking to prove their respective cases regarding the applicant's expenses claim. For the applicant five affidavits were filed, four deposed by the applicant and the fifth by his solicitor, Ben Richard Borham. Each of the affidavits had extensive annexures or exhibits. The applicant was required for cross-examination. 6The first of the applicant's affidavits was filed on 23 March 2007. The affidavit explained how the applicant came to apply for the position of Senior Security Specialist with the respondent, what was said to him in his job interview, his engagement, the nature of his duties, the hours he worked, his claim for an on call /recall allowance and his attempts to recover unpaid expenses. 7The applicant's second affidavit, filed on 9 September 2010, was a response to an affidavit of Jocelyn Everjuan Baclor, the respondent's Human Resources Manager in Australia. The third affidavit of the applicant, filed on 17 September 2010, was mainly in reply to an affidavit of Ms Joy Teo, the Manager/Controller for the respondent in Australia whose duties included overseeing the accounting and revenue operation functions in Australia and New Zealand for the respondent and the processing of employee payrolls. Attached to this affidavit was an expenses table prepared by the applicant referred to as "RMT1". In that table the applicant identified the date of an expense claim he made, the payment method, the supplier of the goods or service purchased, a description of the goods or service, the amount of expense incurred and where necessary the exchange rate calculation. The total amount of expenses outlaid in the table was $131,758.15. 8The applicant's fourth affidavit, including some four volumes of exhibits, was in response to further affidavits of Ms Teo and Ms Baclor in December 2011 and January 2012, respectively, and of Mr McCreath filed on 10 January 2012. Mr Borham's affidavit, sworn on 2 May 2012, purported to be a history of the respondent's non-compliance with Notices to Produce. Mr Borham's affidavit also referred to correspondence between the parties' solicitors in which the applicant compromised his claim such that the amount he was seeking was $18,563.41.

For the respondent 9For the respondent, eight affidavits were filed. Two were those of Ms Baclor. In her first affidavit Ms Baclor dealt with the employment of Mr Mejias and various policies and procedures of the respondent including On Call and Recall, the respondent's International Profit Manual, which set out policies and procedures relating to the respondent's financial systems and internal financial controls. In her second affidavit Ms Baclor referred to a decision of Ritchie C in Mejias and Federal Express Australia Pty Ltd [2006] NSWIRComm 1016 in which the Commissioner dismissed an application by Mr Mejias for relief from unfair dismissal. Ms Baclor also identified the three employees in Australia who were designated as eligible to receive benefits under the respondent's On Call and Recall policies. 10In her second affidavit Ms Baclor also referred to her knowledge of a claim by the applicant in 2003 for payment of the "On-Call/Recall Allowance". Ms Baclor provided information regarding the payment of overtime to employees and the claim in 2003 by the applicant for a compensation and benefit review. Ms Baclor was required for cross-examination. 11Two affidavits of Ms Joy Teo were filed. Ms Teo's affidavit dealt almost exclusively with the issue of the applicant's claim for unpaid expenses. In her affidavit, Ms Teo: (a) identified expenses claimed by Mr Mejias that were reimbursed and paid to him; (b) identified (at para (271) of her first affidavit) a list of 256 items "of alleged outstanding expenses" in respect of which Ms Teo was unable to locate any "expense reports, receipts or other supporting documentation". 12Ms Teo generated a report from the respondent's accounts payable system to identify all of the expense payments made to the applicant in the period 1 June 1998 to 31 May 2007. Ms Teo deposed that the total amount reimbursed and paid by the respondent to Mr Mejias in the period was $117,182.47. 13In her first affidavit Ms Teo stated that it was not the respondent's policy to "reimburse employees for personal items such as interest, annual fees, internet charges, account service fees, fees for overdue payments, charges relating to financial institutions, pharmacy expenses, cash advance fees, newsagency expenses and 'Amex charges' ". 14In her second affidavit, consisting of some 446 paragraphs, Ms Teo sought to address material in the applicant's affidavit relating mainly to his unpaid expenses claim. In her affidavit Ms Teo: (a) identified the process for employees seeking reimbursement for any expenses; (b) indicated that a total of $119,182.47 (including a $2,000 reimbursement paid to the applicant after the termination of his employment) was reimbursed and paid to the applicant. In addition, the respondent reimbursed and paid to Mr Mejias $3,206.52 with respect to mileage amounts; (c) stated that when the respondent runs a payment cycle, the journal listing will generate a payment entry. This payment entry indicates that the respondent has processed the payment and the amount has been deducted from the respondent's bank account; (d) indicated that the journal listing is "FedEx's record where the company can identify the specific voucher number for invoices and expense reports so that FedEx can: (a) retrieve any documents in support of a claim; and (b) trace payments to a vendor/employee". (e) referred to the applicant's expenses table in RMT1. Ms Teo addressed each of the 935 individual line items set out in RMT1 and tied (where possible) the item to a voucher number, the respondent's journal listing ("JT150") and Mr Mejias' bank accounts; (f) was able to match $114,456.85 as having been paid by the respondent, $2,060.96 as pending. Ms Teo: (i) was unable to match $15,885.22 from the applicant's list of expense claims; (ii) sought to demonstrate that a total of $119,182.47 was reimbursed and paid to the applicant in respect of expense payments; (iii) found that $1,416.08 in amounts that were submitted by the applicant were rejected/disallowed by the respondent during the applicant's employment; (iv) found that Mr Mejias was paid $3,206.52 with respect to mileage amounts. 15In her examination in chief Ms Teo explained "JT150": Okay, basically I have generated this journal listing from our accounts payable system. The accounts payable system actually indicates the expense report or the invoices that we receive, expense reports or the invoices that we receive from vendors or employees we will enter into the system and it will create accrual entry. When we run our weekly pay cycle it will generate a payment entry. So the purpose of this journal listing is to show that FedEx has received, processed the expense report and at the same time make (sic - made) payments for those expense reports that we have received. 16Where Ms Teo stated in her affidavit that she was unable to match $15,885.22 from the applicant's list of expense claims, she explained in her oral evidence: When unable to match, it's probably either, one, we have not received any of the expense vouchers submitted, or from the description of each item there's no detail information for me to identify against our vouchers that we have processed. 17To summarise the difference between the applicant's evidence regarding expenses and that of Ms Teo's, the applicant claimed he expended $131,758.15 in the course of his employment with the respondent, but was only reimbursed $93,906.14. Ms Teo's evidence was that the respondent had paid to the applicant an amount of $119,182.47 for expenses ($2,000 of which was paid after the applicant's employment had been terminated). Thus, on the one hand the applicant contended he was owed $37,852.01 in unpaid expenses incurred by him during his employment and, on the other hand the respondent contended the applicant was paid $119,182.47 and that no further amounts were owed to the applicant for expenses. I note in respect of this last amount $2,000 had been deducted from the applicant's final salary by the respondent. However, the respondent subsequently repaid this to the applicant after he brought the matter before the Chief Industrial Magistrate. The applicant had already given the respondent credit for payment of the $2,000, so the respondent's total should still be $117,182.47. 18However, this is not the end of the matter. On 23 April 2012, the applicant provided to the respondent a list of outstanding expenses that was compiled using the respondent's reconciliation of its journal entries with the applicant's bank statements as contained in Ms Teo's affidavit of 20 December 2011. The total of outstanding expenses was $16,497.26 plus outstanding mileage of $359.87, plus "Erroneous Reconciliations" $718.95, plus "Dubious Payments" $987.33 making a total of $18,563.41. That is to say, in compromising his original claim of $37,852.01 in unpaid expenses, the applicant contended he was owed $18,563.41. 19The affidavit of Brian McCreath was sworn on 10 January 2012. Mr McCreath described: his role as Manager, International Security for the respondent, the structure of the Security Department - Asia Pacific Region, the purpose of the Senior Security Specialist position, the recruitment of Mr Mejias by Mr McCreath, Mr Mejias' duties, the respondent's position regarding time off in lieu and travel, the respondent's position regarding the on call/recall allowance, the respondent's position regarding Mr Mejias' request for a salary review, Mr McCreath's actions in respect of the applicant's expense claims, the circumstances leading to the termination of the applicant's employment, and he provided a response to the first and second of the applicant's affidavits. Mr McCreath was required for cross-examination. 20The respondent's next affidavit was that of Brigid Maher, a solicitor for the respondent. Ms Maher deposed to the respondent's efforts to obtain further and better particulars from the applicant. The next affidavit was that of Christopher Anthony Oliver, the solicitor with carriage of the respondent's case. Mr Oliver also dealt with requests by the respondent for further particulars. 21The final affidavit for the respondent was that of Maria Hurley-Smith, another solicitor acting for the respondent. Ms Hurley-Smith's affidavit dealt with various correspondences with the applicant and other matters. Neither Ms Maher, Ms Hurley-Smith nor Mr Oliver was required for cross-examination. 22There were a number of other documents filed into evidence by both parties and I will address them where necessary in the course of this judgment.

Formation of the employment contract, duties 23Counsel for the applicant, in their written submissions, accurately summarised the evidence as to how Mr Mejias came to be employed in the position of Senior Security Specialist and the conditions of employment that applied to that position. As counsel stated, the applicant was initially employed by the respondent from on or about 6 December 1999, as a Senior Credit Controller. He was promoted to a National Revenue Manager, in or about June 2000. In this latter position he was remunerated in the amount of $74,000 per annum for approximately 80 hours per week. This position was categorized at this time as a "Grade 30". 24In early 2002, the role of Senior Security Specialist was advertised with the following duties and responsibilities: a) Develops and implements Security Awareness Programs; b) Develops and implements Loss Prevention Programs; c) Provides matrix support to various levels of Management; d) Conducts investigations into thefts, pilferages, acts of vandalism, misconduct and other activities detrimental to the company, its employees and its customers; e) Develops and maintains liaison with local, state and Federal Law enforcement agencies; f) Provides for the protection of senior management as specified in the Executive Protection Program as required; g) Performs Security surveys and facility and aircraft ramp inspections as required; h) Participates in joint sales calls to minimize package loss/theft, purpose solutions. KNOWLEDGE, SKILLS AND ABILITIES REQUIRED: Bachelor's degree or local country equivalent. Five years Law Enforcement/ Airlines Security or related professional experience. Knowledge of CCTV and theft detection devices. Frequent overnight travel may be required. Must be fluent in English (both written and spoken) as well as the local language. Ability to complete required training programs. Good human relations and investigative skills. 25As counsel observed, in August 2003 the position was said to have the following areas of responsibility: (a) Employee Protection Measures: Implement and develop security awareness programs as aids in achieving employee compliance with Corporate Security Policies and procedures; provide matrix support with all levels of Management when necessary to ensure security of all FedEx; maintains secure work environment for all employees. (b) Loss Prevention Measures: Develop and implement security plans and awareness programs for the frontline employees; execute security procedures and guidelines and communicate to both FedEx employees and customers in order to ensure a substantially reduced rate for losses of packages, reduced payouts and protect company, employee or customer properties. (c) Asset Protections Standards: Execute Corporate Policies and Procedures on protection of FedEx facilities and assets; ensure operations of security systems in order to protect employees and company properties, company assets and customer properties. (d) Investigations: Conduct investigations into thefts, pilferages, acts of vandalism, misconduct and other activities detrimental to FedEx, employees and customers; inform Security Manager and local authorities (if necessary) on results of investigations in order to determine and address deficiencies, recover missing property and provide evidence for disciplinary / legal actions; (e) Operations Security: Perform security surveys; perform facility and aircraft ramp inspections as required; maintain systems and controls to prevent unauthorized access to FedEx properties; maintain procedures to ensure integrity to proprietary and other sensitive information; maintain security standards and policies; liaise with management when necessary to assure security of all people and property in order to ensure that FedEx maintain a safe and secure work environment for all employees and customers. (f) Customer Liaison: Participate in joint sales calls to information customers on security-related issues; propose solutions and implement preventative measures for customer security places in order to obtain new businesses and maintain existing businesses. (g) Contingency Planning: Respond to crisis and emergence situations as required on a 24 hour, 7 day a week basis (on call); maintain crisis management plans for all security. (h) Regulatory/Law Enforcement Liaison: Develop and maintain liaison with Law Enforcement agencies to ensure prompt response to FedEx needs in order to ensure smooth flow of operations and that FedEx operations are in compliance with all local and international regulations and laws. 26Counsel for the applicant suggested, "although the role involved much autonomy, it was not a management position". This position was graded as 27. 27Counsel submitted: Motivated by the fact that the new role was closely linked to his previous experience in investigations and technical surveillance, the Applicant applied for the position of Senior Security Specialist. In transferring from his former position as National Revenue Manager, he was looking for a role that allowed him to spend more time with his family as his mother was continuing to have heart problems, to further his educational studies and his desire to have some more personal time so that he could settle down. 28Counsel for the applicant referred to the applicant's interview with Mr McCreath. According to the applicant the conversation was to the following effect: McCreath: Why are you applying for a lesser position with less money? Applicant: My current work commitments and hours had been frustrating my past legal studies and MBA studies and I need a position where I can reduce my hours of work. McCreath: This Senior Security Specialist Role does not involve extensive hours and we are very flexible with the hours. You will need to work back sometimes but we will expect you to take time off in lieu and not work long hours. 29It was Mr McCreath's evidence that the following conversation occurred regarding working hours: Myself: "The role will require extensive travel and unpredictable hours including weekend work. The position requires you to act on a reactive basis. We have very little control over the work that we may be required to attend to. You will be expected to respond to incidents where and when they occur. This requires flexibility. For example, we may send you to New Zealand tomorrow and Fiji the next day. How would you feel about that?" Mr Mejias: "That sounds fine to me." Myself: "The role will require extensive travel and you may be required to be away from home for lengthy periods. The role also requires you to review the security arrangements in the Oceania Region. You will be required to work as part of the Asia Pacific security department. While you may work long hours, there is an opportunity for you to take off time in lieu. There is an understanding within the department that if work is required to be done, which means you are having to work long hours, there is a flexible approach which allows you to take time off in lieu. It seems to work well for everyone and means that you have a degree of flexibility. Would you be comfortable with these arrangements?" Mr Mejias: "Yes." Myself: "The position is flexible because you can make your own work schedules. As long as you are meeting the needs of the business you can prioritise and work the hours that meet your own requirements." Mr Mejias: "Not a problem." 30By letter dated 3 May 2002, the applicant was offered the position as Senior Security Specialist. Relevantly the letter read: 4. HOURS OF WORK: You will be required to work no less than 38 hours each calendar week excluding meal breaks and other rest periods. These hours are subject to change depending on business needs. ... 7. OVERTIME: You may be required to do overtime work from time to time. You will not be paid for such work. 31It is correct that time off in lieu was an element of the arrangement between the applicant and his employer as demonstrated by various emails between Mr McCreath and the applicant where time off was sought and granted. It is also correct that it was recognised by management and Mr McCreath in particular, that the applicant was "burning the midnight oil in doing the best job possible for the company". 32As Senior Security Specialist (of which there was only one in Australia) Mr Mejias' duties included responding to crisis and emergency situations as required on a 24 hours, 7 day a week basis. His area of responsibility was Australia, New Zealand, Solomon Islands, Vanuatu and Fiji. His duties involved investigations of allegations of theft, fraud or misconduct by other FedEx employees, policy development, implementation in relation to security and loss prevention and liaising with government authorities such as the Department of Transport and Regional Services, Australian Customs Service, Australian Quarantine, Inspections Service and National Crime Authority and Federal and State Police. 33As the respondent acknowledged, the position was one of significant autonomy, responsibility and trust with respect to each Specialist setting their own work schedules in accordance with local work priorities and objective within the area of responsibility. 34According to the applicant, the respondent's facilities failed to comply with the Department of Transport and Regional Services and Customs regulations as people regularly walked in, out of and around the facilities without impediments from the respondent's staff, security, or physical barriers. In order to remedy these deficiencies the applicant was required to work long hours each week. The respondent was made aware of this matter through email correspondence and the monthly calendar, in the form approved by the respondent. 35Further, according to his evidence the applicant was required to provide investigation reports on union activities outside normal hours. He was required to work back to resolve complaints against the respondent on numerous occasions. He was required to work to provide support when union activity was generated over proposed contract changes. He was required to take action to implement aircraft security which included hours of inspections on security, staff an aircraft. The applicant was required to be available to provide 24-hours support.

Hours of work 36In relation to his hours of work, the applicant's letter of offer indicated that he was expected to work a minimum of 38 hours and that he would be required to work overtime "from time to time". 37The applicant contended that between 20 May 2002 and 1 April 2005, he recorded working 1533.4 hours in overtime in excess of time taken off in lieu. These hours included hours that he was not scheduled to work, but was on call and recalled by the respondent after he had completed his scheduled hours. In addition to these hours, the applicant worked 732.2 hours in excess of his required 38 hours per week in the period 20 May 2002 and 1 April 2005. 38The applicant's evidence was he was required to maintain a calendar of hours of work undertaken by him and provided to his immediate superior, Mr McCreath, on a monthly basis along with data confirming investigations, drug matters, the number of people terminated or suspended and his involvement in respect of each. This calendar reflected most of the hours worked by the applicant. 39The applicant submitted that the respondent is deemed to have admitted that the applicant did work the hours that he contended he did. The applicant's spreadsheet of hours was submitted to the respondent on a monthly basis, and the recorded hours were never disputed by it. There being no denial of the hours he worked, it was submitted r 14.26 of the Uniform Civil Procedure Rules 2005 deemed this to be an admission by the respondent that the applicant worked the hours pleaded. 40It was further submitted there were no time books produced by the respondent during any period of the employment of the applicant, which would have provided documentary evidence as to the applicant's starting and finishing times throughout his employment. These documents, it was submitted were required to be kept by the employer under the industrial/employment law of the Commonwealth (see reg 131T of the Workplace Relations Regulations 1996 (Cth) which applied at the relevant time, made pursuant to s 353A of the Workplace Relations Act 1996 (Cth)). Counsel for the applicant submitted it could only be assumed that the applicant's record of hours worked fulfilled the statutory requirements and should be read as such. 41In relation to time off in lieu, the applicant submitted the respondent produced no records that reveal the applicant was given time off in lieu of the hours of overtime he worked. Similarly, that these records should be accepted as those required to be kept by the employer under industrial/employment law, be it the law of the State or the Commonwealth. 42The applicant's calendar shows that between 1 June 2002 and 31 March 2005 he worked 2265.6 hours of overtime without payment (the equivalent of 308.10 days). The applicant adjusted these figures to account for time taken off in lieu of overtime. 43In relation to these hours, counsel for the applicant submitted: The Respondent's management was or should properly have been aware by a review of the Applicant's monthly spreadsheet submissions that the Applicant was working excessive overtime hours. Mr McCreath conceded that he did not check the Applicant's calendar of hours submitted monthly despite him raising issues about his excessive hours and Mr McCreath being in control of his tasks and travels. However, it was obvious to Mr McCreath from the Applicant's calendar of hours that he was working more than 38 hours a week. Mr McCreath was conscious of this as early as April 2003. Mr McCreath conceded that the Applicant was working those excessive hours on company business, and [conceded] that it was an alarming amount of time at work and it was "excessive". Mr McCreath agreed that, up until the time the Applicant's employment was terminated, that the Applicant was doing what he said he was doing in relation to the hours he worked. An examination of the Applicant's calendar of hours reveals that there are many examples of the Applicant working between 10 to 20 days straight (and some stretches over 20 days) without a break. This meant that when the Applicant did take time off, it was not time off in lieu as he was owed more than time off in lieu, in very many instances he was owed weekends. The Applicant averaged 86.7 hours per week in his role as Senior Security Specialist, which demonstrates his overtime and recall to work was not "from time to time" but rather was regular and excessive. The Applicant was required to travel overseas as part of his employment, and acceded to requests by the Respondent's management to work in the Philippines on occasions. Nevertheless, he was still required to meet the demands of his role in Sydney whilst overseas and which compounded his workload. The Applicant did take some time off in lieu of overtime. Nevertheless, his workload continued to compound during these breaks. Although the Respondent monitored the surmounting work in the Applicant's absence, it did nothing about it. It was not delegated to another employee; it remained untouched until the Applicant's return. 44Mr McCreath deposed in his affidavit to the following: In accordance with the Contract, Mr Mejias was expected to work no less than 38 hours each week or 7.6 hours per day. FedEx nor myself, as Mr Mejias' direct Manager, did not expect Mr Mejias to regularly work hours in excess of 38 each week. During the course of Mr Mejias' employment in the Position, I recall having a conversation with Mr Mejias where words were said to the following effect: Myself: "You are only required to work 8 hours a day. I have never asked you to work beyond 8 hours a day. If you do it's at your discretion, completely your decision. It's because you want to do that. You need to prioritise and concentrate on what you need to do. If you have to work beyond your scheduled hours by all means take time off in lieu." Mejias: "Yeah okay. I will try. I understand that I need to prioritise things." Myself: "You need to focus on the important issues. If you find yourself working long hours, go home." I recall having similar conversations with Mr Mejias on several occasions during the course of his employment in the Position. (emphasis in original) 45On the question of time off in lieu, Mr McCreath stated: As the Manager of the Security Department, I like to maintain a flexible approach to how employees approach their own individual work schedules and access time off from work. Due to the at times unpredictable nature of the jobs we as a department are asked to respond to I make it clear to employees within the Security Department that if they are required to work long hours or perform work on weekends they can approach me regarding time off or just come in late or leave early depending upon their own individual work requirements. This flexibility provides employees with a large degree of independence in managing their own work times. If an employee wants to take a day off, I expect that they will either communicate this request to me verbally or in writing. I do not recall ever denying an employee's request to take a day off or time off in lieu. From my review of the monthly calendars annexed to this affidavit ... in the period June 2002 to March 2005, Mr Mejias took a total of twenty five (25) paid days off in lieu as a result of the hours he had worked. ...

On-Call and Recall 46The respondent's policies included those relating to On-Call and Recall Policies in both Australia and internationally. The policies required employees to remain on-call to address "operational emergencies". 47The On-Call policy covered all eligible, non-management employees, as identified under the guidelines of the On-Call Policy. The Policy provided, relevantly, the following with respect to "Eligibility": A Vice President shall predetermine the operations and systems which are essential to Federal Express' business and which may need to be supported on a 24-hour basis, because any disruption would cause a material loss to Federal Express' business. An employee is deemed to be "on-call" during a specific period whereby he/she is: Available and accessible to respond to work-related support outside normally scheduled working hours. An on-call employee is not required to remain at home, but must be able to be reached by pager or telephone. The employee must be able to return to their place of work or other work location (including the employee's home). ... Fit for duty ... e.g. no alcohol Specifically required to be "on-call". An employee who simply carries a pager or handphone or other communication device, but who is not assigned specific support responsibilities by management, is not considered to be on-call Eligibility for Recall Policy: During the time that the employee is on-call and he/she is required to go back to the workplace or other location to address work-related issues, the employee is eligible for recall payments. ... Special note: An employee who is required to work outside normal scheduled working hours (including weekends and public holidays) to provide the scheduled support to the operations will not be eligible for on-call payments. Such hours may be treated as overtime. 48The On-call Policy provided eligible employees with a flat rate on-call payment of $248 per month. 49The Recall Policy applied to the respondent's employees to be recalled to work to address operational emergencies. The scope of the policy was all eligible Federal Express employees, identified under the guidelines of the Recall policy. 50The Recall policy identified the following matters as pertaining to the eligibility for this benefit: Employees who are required to report to work at management's request to address an emergency. An employee may be requested to report to work after the completion of a regularly assigned shift, on a weekend, public holiday, or on a scheduled day off. The employee is entitled to recall payment if: The recall is requested by management. The employee is employed in the operations, systems and/or employee groups which the relevant Vice President has determined should be subject to recall. The employee reports back to work fit for duty ... Special note: An employee is not entitled to a recall payment if he or she is required to work outside normal scheduled working hours (including weekends and public holidays) in an effort to complete assigned tasks that are a regular part of his or her job. 51The payment arrangement if a full-time employee was recalled was: if the employee worked less than two hours, the employee was guaranteed two hours payment at the applicable overtime rate; if greater than two hours, payment was according to the total hours worked at the applicable overtime rate. 52Five positions in Australia were designated for the On-Call and Recall benefits. 53In his oral evidence Mr McCreath considered the applicant to be on-call, and able to respond to crisis and emergency situations as required on a 24hour 7day a week basis. The applicant's role from time to time required him to go where he was sent by the respondent for a variety of tasks. 54The applicant regularly received directions from Vice President William Henrikson that required urgent action for aircraft security to be taken that included out of hours inspection on security, staff and aircraft. 55Mr McCreath, in his oral evidence, agreed that the Senior Security Specialist position should be eligible for on-call payments. 56On 17 May 2004, the applicant formally requested in a letter addressed to Vice President Mr William Henrikson (Corporate Security) and Vice President Mr John Allison (Human Resources, Asia Pacific):

1. An increased Salary Grade in line with market review and competitors.
2. Total Compensation Benefits Review with specific market review on Transport Security.
3. On-Call/Recall/Medical Allowances in line with other professionals.
4. Contracted admin support or additional FTE's for AU/NZ.
5. VP approval for pay exception whilst above is reviewed and finalized. 57This request was refused in a letter from Mr Allison dated 15 June 2004 in the following terms: In response to your email to William P. Henrikson and myself, APAC Rewards has reviewed your compensation package. The analysis has revealed that your salary level and grading is competitive and so no adjustment to your salary is appropriate. We do not compare your position against any management position. As in other APAC markets, the benchmark used is the appropriate professional level. As well, instead of benchmarking FedEx's pay practice with one particular company, we make use of multiple surveys to ensure data completeness and accuracy. In view of your current job responsibilities, the company benchmarks your position at similar level to that of a senior security specialist from two reputable compensation surveys, i.e., Mercer HR Consulting and Classified Salary information (CSi). Both surveys are extensive and comprised of more than three hundred sizeable companies. As a result, we are able to assure that you are paid competitively. Undoubtedly, this is not what you wanted to hear. We have reviewed your compensation, but simply find no adjustment appropriate. The letter said nothing about the On-Call or Recall claims by the applicant.

Expenses 58As earlier indicated, the applicant contended he expended $131,758.15 in the course of his employment with the respondent, but was only reimbursed $93,906.14. The respondent contended that it reimbursed the applicant $117,182.47. 59The issue of expenses is a veritable minefield of claim and counter claim and a morass of spreadsheets, claim forms, receipts, invoices and bank statements. Let me start with the claim. In the summons for relief the applicant claimed in respect of expenses $852.55 and "others to be advised". In his March 2007 affidavit the amount claimed was $33,299.55. In March 2012 the amount owed was identified as $37,852.01, which is the difference between $93,906.14 (the amount the applicant claimed he was reimbursed for expenses) and $131,758.15 (the amount the applicant claimed he expended on behalf of the respondent). 60As mentioned earlier, on 23 April 2012, the applicant provided to the respondent a list of outstanding expenses that was compiled using the respondent's reconciliation of its journal entries with the applicant's bank statements as contained in Ms Teo's affidavit of 20 December 2011. The total of outstanding expenses was $16,497.26 plus outstanding mileage of $359.87, plus "Erroneous Reconciliations" $718.95, plus "Dubious Payments" $987.33, making a total of $18,563.41. 61On 30 April 2012, in opening the case for the applicant senior counsel stated that the expenses claim was: $19,000 or a figure of something like that. 62The applicant's explanation for his changing position regarding the expenses owed to him was that he was not able to identify with any precision what he was owed because despite being served with Notices to Produce, the respondent had never furnished any of the following pieces of evidence: (a) bank statements (the source documents); (b) complete bank reconciliations prepared by their bank (Citibank); or (c) evidence of payments to the applicant by other methods. 63The applicant contended that at no stage did the respondent undertake a full and complete bank reconciliation and the only complete proof that any of the journal transactions actually occurred as anticipated by the book entries (except so far as those journal entries had been matched to payments made into the applicant's bank accounts) was contained in the applicant's bank statements. 64It may be accepted that the applicant has compromised his claim in a specific way. In relation to the reconciliation provided by the applicant to the respondent on 23 April 2012, the applicant's evidence was that he undertook this exercise as a commercial compromise in order to reduce the costs associated with defending his position that he expended a certain amount of money (evidenced by expense reports, receipts and bank statements), had been reimbursed a certain amount of money into his bank accounts and that the difference was the amount owed to him. 65As far as the Court is concerned, it does not intend trawling through years of inconclusive accounting information to determine whether the applicant is or is not owed the $37,852.01 he claimed he was owed in March 2012. The Court has examined whether the compromise claim of $18,563.41 is justified. Senior counsel said in his opening the amount sought to be recovered was "$19,000 or a figure of something like that." I take that to be the $18,563.41 referred to in Mr Borham's affidavit.

The relevant legislation 66The applicant's claim is made pursuant to the provisions of Pt 9 of the Act, "Unfair Contracts". The claim is amongst the last to be dealt with by the Industrial Court in relation to contracts with constitutional corporations, the power to deal with such contracts having been rendered inoperative by federal law in relation to claims after March 2006. The unfair contract laws in New South Wales had operated for nearly 50 years in providing effective remedies for unfair contracts. No such effective remedy now exists for employees of constitutional corporations. 67The core statutory provisions are ss 105 and 106: 105 Definitions (1) In this Part: contract means any contract or arrangement, or any related condition or collateral arrangement, but does not include an industrial instrument. unfair contract means a contract: (a) that is unfair, harsh or unconscionable, or (b) that is against the public interest, or (c) that provides a total remuneration that is less than a person performing the work would receive as an employee performing the work, or (d) that is designed to, or does, avoid the provisions of an industrial instrument. (2) A contract is not an unfair contract for the purposes of this Part merely because of any provision in the contract that gives effect to a policy that is declared under section 146C. (3) A contract relating to the employment of a police officer is not an unfair contract for the purposes of this Part merely because of a matter relating to payments of a kind to which section 146D applies. 106 Power of Commission to declare contracts void or varied (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. (2A) A contract that is a related condition or collateral arrangement may be declared void or varied even though it does not relate to the performance by a person of work in an industry, so long as: (a) the contract to which it is related or collateral is a contract whereby the person performs work in an industry, and (b) the performance of work is a significant purpose of the contractual arrangements made by the person. (3) A contract may be declared wholly or partly void, or varied, either from the commencement of the contract or from some other time. (4) In considering whether a contract is unfair because it is against the public interest, the matters to which the Commission is to have regard must include the effect that the contract, or a series of such contracts, has had, or may have, on any system of apprenticeship and other methods of providing a sufficient and trained labour force. (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. (6) In making an order under this section, the Commission must take into account whether or not the applicant (or person on behalf of whom the application is made) took any action to mitigate loss.

Relevant principles 68In Walker v Industrial Court of NSW (1994) 53 IR 121 the Court of Appeal held at 133: In determining whether "unfairness" in the contract or arrangement has been established, regard may be had not merely to the terms of the contract or arrangement, as originally negotiated, but also to the manner in which the contract or arrangement has ultimately worked out and operates as between the parties to it. ... 69Similarly, Mason P, with whom McColl JA agreed, held in Sydney Water Corporation Ltd v Industrial Relations Commission of NSW [2004] NSWCA 436; (2004) 61 NSWLR 661 at [25] that: [25] Section 106(2) states in the plainest of terms that a contract may become unfair, so as to attract the jurisdiction of the Commission, because of post-contract conduct of the parties. But it is the "contract" that is to be held unfair, and not the conduct, in the final analysis. ... 70The test of unfairness, according to a majority of the former Industrial Court, is to be determined according to "the common sense approach characteristic of the ordinary juryman. ... It is a plain matter of morals not law": Baker v National Distribution Services Ltd (1993) 50 IR 254 at 271. That test is derived from what Sheldon J stated in Davies v General Transport Development Pty Ltd [1967] AR (NSW) 371 at 374. 71In A & M Thompson Pty Ltd v Total Australia Ltd [1980] 2 NSWLR 1 at 13 the Full Bench of the Industrial Relations Commission in Court Session referred to a test of unfairness and also to the need to take into account the comparative bargaining position of the parties: It has been said that fairness is determined by the commonsense approach of a juryman, and that it is a moral and not a legal issue (Davies' case (5b)). Whether this be so or not, it does seem that, in distinguishing between what is fair and what is not fair, the judge must apply standards which appear to him to provide a proper balance or division of advantage and disadvantage between the parties who have made the contract or arrangement. In doing so, he would always have to bear in mind the conduct of the parties, their capability to appreciate the bargain which they had made and their comparative bargaining positions when entering into the contract or arrangement. 72It is also relevant to refer to the application of the "clean hands" principle in the Court's unfair contracts jurisdiction. In Westpath Services Pty Ltd v Joseph [2007] NSWIRComm 211; (2007) 166 IR 135 the Full Bench decided at [71] that: [71] ... It is contrary to the statutory scheme relating to unfair contracts to subject them to the full force of the equity principle of "clean hands". As FAI Insurances v Pioneer Concrete Services makes clear, the principle operates within a narrow sphere and does not result in any wrongful conduct (especially if not connected to the relief claimed) becoming a bar to the granting of orders if unfairness is otherwise established. The statement of the Full Bench in Subway v Costin (made tentatively because it was not fully argued) is now to be regarded as an authoritative statement of the law in relation to s 106 applications. There is no warrant for the elevation of the clean hands principles as a substitute for the proper exercise of the discretion residing in the Court under s 106(5): while there may be factors which may disentitle an applicant to discretionary relief, these are factors which will arise in the circumstances of the particular case. 73In Subway Development of NSW/ACT Pty Ltd v Costin [2007] NSWIRComm 95; (2007) 162 IR 197 the Full Bench stated in relation to the "clean hands" principle: [4] Further, there must be real doubt about the application of the principle simpliciter in the exercise of the Court's discretion under s 106 in any event: cf Howitt v Retec Limited (No 2) (1995) 60 IR 93. There is no warrant for the erection of such a formula in substitution for the proper exercise of the discretion residing in the Court under s 106(5). There may be factors which may disentitle an applicant to discretionary relief, but these are factors which will arise in the circumstances of the particular case. We note in passing that the principle seems to have been in any event overstated in argument in this matter: see, for example, FAI Insurances Ltd v Pioneer Concrete Services Ltd (1987) 15 NSWLR 553 at 561.

The claim 74The applicant contended his contract of employment with the respondent was unfair, harsh and unconscionable in its terms and/or the contract, by reason of the way in which it was expected to be performed, became unfair. The applicant sought orders declaring the contract unfair, declaring it void in whole or in part or varying it in whole or in part either from its commencement or from some other time, and consequential orders for the payment of money in connection with such declarations as the Commission considered just in the circumstances of the case. 75The applicant further contended that the contract of employment was unfair because it failed to provide adequately for any compensation for hours worked in excess of scheduled hours, the respondent did not pay him fairly for the hours he was required to work and it failed to pay him fully for the expenses incurred in the course of his employment. 76In his summons for relief the applicant set out the particulars of his claim as follows: (a) Unpaid overtime. 1533.4 hours x 39.67 per hour x 2 (double time) = $121,818.64 (b) Unpaid hours worked beyond 38 hours per week (not being hours worked while on call or hours worked as a result of recall) 732.2 hours x $39.67 per hour = $29,046.37 (c) On-call Allowance $248 per month x 35 months = $8,680.00 (d) Reimbursement of unpaid business expenses $852.55 and others to be advised (e) Costs (f) Interest 77It was not in issue that the applicant performed work pursuant to a contract of employment with the respondent. However, in applying s 106 of the Act, the precise terms of the contract must be identified: see Toll Transport Pty Ltd v Transport Workers' Union of New South Wales [2010] NSWIRComm 58; (2010) 194 IR 144 at [55]; Fish v Solution 6 Holdings Ltd [2006] HCA 22; (2006) 225 CLR 180; (2006) 151 IR 256 at [19] and [43]; and TD Preece & Co Pty Ltd v Murton [2007] NSWIRComm 130; (2007) 164 IR 396 at [18]. 78I find on the evidence that the following matters relevantly constituted elements of the contract of employment between the applicant and the respondent: (a) the applicant was employed by the respondent in the position of Senior Security Specialist and commenced that employment on or about 20 May 2002; (b) the position was graded "27" with a commencing base salary for the position was $69,636 per annum, reviewed annually and adjusted in accordance with the applicant's performance at the respondent's discretion. By April 2005 the salary had increased to $78,386.00 per annum; (c) the position reported to the Manager of International Security in the Philippines; (d) the applicant's area of responsibility was Australia, New Zealand, Solomon Islands, Vanuatu and Fiji. His duties involved investigations of allegations of theft, fraud or misconduct by other employees of the respondent, policy development, implementation in relation to security and loss prevention and liaising with government authorities such as the Department of Transport and Regional Services, Australian Customs Service, Australian Quarantine, Inspections Service and National Crime Authority and Federal and State Police; (e) the employment of the applicant was on a "permanent full-time basis"; (f) the contract provided that the applicant would be required to work no less than 38 hours each calendar week. Those hours were subject to change depending on business needs. The applicant was to take time off in lieu; (g) the applicant might be required to work overtime from time to time. No payment was to be made for overtime worked; (h) travel and accommodation expenses were to be reimbursed by the respondent; (i) other conditions of employment not referred to in the letter of employment dated 3 May 2002, including payment for being on-call and being recalled to work overtime were as set out in the "FedEx policies and procedures"; (j) from August 2003, the applicant was required to "respond to crisis and emergency situations as required on a 24 hour 7 day a week basis"; and (k) termination of employment could occur by the giving of one week's notice or by payment of one month's pay in lieu of notice.

Unpaid overtime 79In the relevant period the applicant claimed he worked a total of 2265.6 hours overtime. Of that number, 732.2 hours were overtime hours worked where the applicant was required to work beyond his normally scheduled working hours, but was not recalled. In respect of those hours the applicant claimed an hourly rate of $39.67, which appears to have been the applicant's hourly rate at the time his employment was terminated. 80The remaining 1533.4 hours were overtime hours worked when the applicant was not scheduled in advance to work or had finished work for the day, but was subsequently recalled to work. In respect of these hours, the applicant claimed double time at the rate of $39.67 per hour. There was also a claim for an On-call Allowance set at $248 per month for 35 months. 81The amount of hours claimed was derived from a calendar kept by the applicant and provided to Mr McCreath on a monthly basis. This calendar reflected most of the hours worked by the applicant. It missed days worked which were not recorded. It also missed occasions where the applicant started earlier and was on flights such that the start time recorded was later than the time the applicant actually started. The respondent never disputed the hours worked shown on the applicant's calendar. 82According to his calculations the applicant averaged 86.7 hours per week in his role as Senior Security Specialist. There was no evidence put forward by the respondent to show that the applicant's calendar of hours worked was wrong or that his calculation of the average number of hours worked each week was not 86.7. 83It was obvious to Mr McCreath from the applicant's calendar of hours, and conceded by him that the applicant was working more than 38 hours a week. Mr McCreath was conscious of Mr Mejias' claim by April 2003 that Mr Mejias was working an average of 86.7 hours per week for no additional return. Mr McCreath conceded that the applicant was working those excessive hours on company business, that it was an alarming amount of time at work and it was "excessive". 84Mr McCreath agreed that, up until the time the applicant's employment was terminated, the applicant was doing what he said he was doing in relation to the hours he worked. 85An examination of the applicant's calendar of hours reveals that there are examples of the applicant working between 10 to 20 days straight (and some stretches over 20 days) without a break. Thus, not only was the applicant entitled to time off in lieu that he simply was unable to take, he was owed time off in lieu of weekends as well. 86As to time off in lieu, the applicant did take some time off. Nevertheless, his workload continued to compound during these breaks. Although the respondent monitored the increasing work in the applicant's absence, Mr McCreath conceded the respondent did nothing about it. It was not delegated to another employee; it remained untouched until the applicant's return. 87Although the respondent contended the applicant's claim regarding overtime "fluctuates wildly", a contention I am unable to agree with, the respondent did not seek in any determined or forensic way to deny the claim by the applicant as to the amount of hours he worked. The thrust of the respondent's argument was that there was no proper basis for the applicant to rely on overtime rates prescribed by industrial instruments in order to press the claim for an overtime payment. The respondent's contentions may be summarised as follows: (a) the applicant's contract of employment expressly provided that no overtime would be paid for work he performed for the respondent; (b) the applicant's contract stated that the applicant will work no less than 38 hours a week. Yet, the applicant claimed overtime payments for all time above 38 hours per week, notwithstanding the quantum of his base salary was significant; (c) the applicant pointed to no precedent where the Court was minded to avoid a contract because a person not covered by an award or other industrial instrument makes a claim for overtime payments, particularly when such overtime payments are expressly excluded from the contract of employment; (d) any reliance on industrial instruments as to what the applicant should have been paid for overtime neglected to identify the amount of wages he was earning at the time by way of comparison to award wages. It is to be noted that the State award to which the applicant pointed as an exemplar identified that the applicant was relevantly paid a weekly salary more than 100% what the award would have applied to the highest category of persons covered by the award; (e) the applicant pitched the major part of his case as using the award system as the measure of what the applicant ought to have been paid. How could the applicant fit within that general rubric when he is being paid an amount of money, well in excess of the award weekly rates so as to put him expressly beyond the award's reach? 88The evidence overwhelmingly supports the applicant's claim as to the amount of hours he worked between 20 May 2002 and 1 April 2005. The question is whether, in permitting that amount of hours to be worked, the contract was unfair? 89Clearly, the applicant's immediate supervisor, Mr McCreath, was aware of the excessive hours being worked by the applicant. And whilst there was provision in the contract for time to be taken in lieu of additional hours worked and that Mr McCreath advised the applicant not to work such long hours and to prioritise his work, nothing of any substance was done by the respondent to place a curb on the excessive hours. It seems to me the respondent was content to take the benefit of the extraordinary amount of extra hours worked by the applicant and to praise him for his work ethic, but no concrete steps were taken to relieve the applicant of some of his load or give a firm direction to him that would have the effect of ensuring the applicant observed a working hours regime that was reasonable. Moreover, despite the applicant's protests about not being rewarded for his obvious extra effort, the respondent ignored those. 90I agree with the applicant that it is no answer to his contention that time off in lieu was not afforded, for the respondent to say that it was a matter for the applicant to organise his time and prioritise his work such that he could allocate this time off to himself. As the applicant submitted, this was especially so when one of the contract's requirements was 24 hour/7 day a week on-call responsibility responding to crisis situations at the respondent's direction. As the applicant submitted: In these circumstances, it is not appropriate nor is it fair for the Respondent to lay this responsibility at the Applicant's feet, instead there ought properly have been within the contract or its performance a mechanism by which the Applicant could properly afford himself this time off. Absent this mechanism the contract by its conduct was unfair. 91The respondent relies on the fact that it was a term of the employment contract that no overtime would be paid and that the applicant was generously compensated by way of salary for the hours he worked. It may be inferred that the applicant's initial salary was fixed, at least in part, on the basis of what was said to the applicant in his interview with Mr McCreath for the position of Senior Security Specialist. Mr McCreath said in his evidence that whilst the applicant was told he may be required to work "unpredictable hours" and "long hours" he would be able to take time off in lieu, but that he did not expect Mr Mejias to regularly work hours in excess of 38 hours each week. 92As I have explained, the opportunity to take time off in lieu of the hours the applicant worked beyond 38 hours per week did not materialise to any reasonable degree and the applicant worked an average of 86.7 hours per week, more than twice the stated hours in his contract of employment. In those circumstances the applicant's salary could hardly be described as generous. Indeed, it could only be described as inadequate. 93The applicant's evidence was that in his interview he was told by Mr McCreath he would not have to work extensive hours, would only be required to work overtime "sometimes" and he would receive time off in lieu. This would appear to be consistent with the basis upon which the applicant accepted the position, namely: (a) he would relinquish his former role as National Revenue Collections and Control Manager so as to work less hours and assume less responsibility, so as to enable him to spend more time with his family and pursue other interests, including furthering his education; (b) he would accept lower pay, in accordance with the lower grading (from Grade 30 to Grade 27), and fewer responsibilities and demands of the Senior Security Specialist position. 94Mr McCreath, in his evidence, acknowledged that he was aware the applicant was seeking a lower paid position. 95Working fewer hours clearly proved not to be the case for the applicant. If one were to accept Mr Mejias' evidence, the salary he was paid for the hours he worked was grossly inadequate. 96In the course of his employment the applicant's salary increased. The increases appear to be the result of compensation and benefit reviews conducted by the respondent involving inter-firm comparisons with positions analogous to that held by the applicant. From what information there was available in the evidence, those reviews do not appear to factor in hours of work for salary comparison purposes. Accordingly, it appears that at no time during the course of his employment was the applicant's salary adjusted to compensate for the excessive hours he worked. 97I note that by way of a Notice to Produce of 13 September 2007 to the respondent, the applicant requested copies of all correspondence relating to the applicant's employment conditions evidencing actual comparisons used by the respondent in conducting its yearly wage review for the applicant. The market reviews were not produced despite evidence of Ms Baclor that she believed such comparisons would have been done. 98The applicant did refer in his evidence to material relating to market research about the wages and conditions of analogous employees in rival companies. The applicant contended even though the respondent did not use the term "Security Manager" for the Senior Security Specialist role, the role's responsibilities were analogous of rival company's security management. He, therefore, contended that he should be remunerated in line with those positions. The applicant contended the average difference between his salary and those of security management employees in rival companies was a minimum of $50,000 per annum. The respondent did not accept such comparisons were appropriate because Mr Mejias was not considered a managerial employee. 99I am reluctant to accept, based on the surveys he produced, the applicant was $50,000 in salary behind the market because not sufficient analysis was provided that would allow me to rely on such a contention. However, there is nothing in the evidence to indicate that in engaging in market reviews of salaries involving inter-firm comparisons the respondent took into account the extraordinary hours being worked by the applicant thereby enabling legitimate comparisons to be made. Indeed, I very much doubt that such market reviews would enable this type of comparison. 100It is generally the case that managerial employees and some classes of professionals do not receive overtime payments and instead their salaries are loaded to take account of the fact that from time to time they will work excessive hours and/or they receive time off in lieu. Indeed, it is not uncommon for managers and executives to regularly work 50 to 60 hours per week. But in Mr Mejias' case, he was not regarded as a managerial employee and salary comparisons were not made with managerial employees in rival firms in setting the applicant's salary. If comparisons were made between the applicant's position and what the respondent considered were equivalent positions in rival firms the respondent produced no evidence to show the comparisons were like with like, that is equivalent positions working more than 80 hours per week. 101It may have been that comparisons were made on the basis of rival firms providing time off in lieu. The applicant was promised time off in lieu, which would have been quite acceptable, but the arrangements for him taking such time off were illusory. For example, when he did take time off in lieu his work continued to pile up. Thus, a comparison between the applicant's salary based on him being able to take time off in lieu of hours worked beyond 38 hours per week and employees in other firms who also took time of in lieu would not have been a legitimate comparison. 102Mr McCreath in his evidence confirmed that the applicant was never paid for the overtime hours he worked or given time off in lieu: Q. He was entitled to take time off in lieu when he worked more than 38 hours a week, wasn't he? A. Yes, he was. Q. Do you say that your corporation has refused to pay him because there was a suspicion that he was not doing that work at all but running some other business, or not. A. No. Q. That was not the reason? A. No. Q. The sole reason why he was not paid is because he is no longer employed there; is that right? He was not paid for the time off in lieu because he was no longer an employee; is that correct? A. Yes, he never took the time off in lieu. 103There was a further exchange with Mr McCreath in cross-examination: Q. Let's start again. You have told his Honour that the refusal to pay had nothing to do with any perception that he might have been running another business? A. That's my understanding, yes. Q. Secondly, you acknowledge that he was prima facie asked to work a 38 hour week; correct? A. Yes. Q. And, thirdly, if he did work in excess of those 38 hours he would be entitled to take time off in lieu? A. That's correct. Q. Fourthly, that you took no issue with the fact that he had recorded, and you had accepted during the course of his employment, that by the time his employment was terminated he had accumulated a couple of thousands hours of excess time? A. I'm not sure of the exact hours, but, yes, he had accumulated hours. 104The applicant's evidence was that the hours he worked were those spent engaged in the respondent's business. Mr McCreath conceded that he had no basis to doubt that the applicant was doing otherwise. Mr McCreath also agreed that time off in lieu was an entitlement. Nevertheless, Mr McCreath asserted that once an employee's employment had been terminated he or she could not have the benefit of the time accrued in lieu. This was presumably on the basis it was the respondent's policy and for no other reason. 105The applicant entered into the contract with the respondent on the basis of a representation that he would be provided with time off in lieu for working beyond his scheduled hours of 38 hours per week. The respondent's effort to enforce the time off in lieu arrangement was completely ineffectual and the applicant continued to work excessive hours with the knowledge of the respondent, which took the benefit of those additional hours. The Court finds that in permitting the applicant to work excessive hours without adequate compensation the contract of employment between the applicant and the respondent was unfair. The contract was also unfair in that it failed to ensure that the applicant was able to take reasonable time off in lieu for additional hours worked outside his ordinary hours of work. 106Where the Court finds the contract was an unfair contract, s 106(1) of the Act enables the Court to make an order declaring the contract wholly or partly void, or to vary the contract to remedy the unfairness. I propose to vary the contract to provide payment to the applicant for time worked in excess of 38 hours per week. I had considered a greater number of hours, say 43, because it would not have been unreasonable to expect the applicant to work more that the minimum on a reasonably regular basis, such extra hours being contemplated in his salary. However, the applicant's contract of employment provided for time off to be taken in lieu when the applicant worked in excess of his scheduled hours. This is confirmed by what Mr McCreath told the applicant in the course of the applicant's employment: You are only required to work 8 hours a day. I have never asked you to work beyond 8 hours a day. If you do it's at your discretion, completely your decision. It's because you want to do that. You need to prioritise and concentrate on what you need to do. If you have to work beyond your scheduled hours by all means take time off in lieu. 107Given that the applicant took only limited time off in lieu and what was taken was deducted from the number of hours the applicant claimed he worked in excess of his scheduled hours, I consider the contract should be varied to provide for payment to the applicant for time worked in excess of 38 hours per week. 108In respect of the 732.2 hours worked by the applicant beyond his normally scheduled working hours the approach I take is that the applicant should be placed in the position he would have been in if the contract of employment in respect of time off in lieu had been observed. That is to say, if the contract had been observed, the applicant would have been entitled to 732.2 hours out of his scheduled working hours and not lose pay. That is the basis upon which he should be compensated, namely, his ordinary hourly rate of pay applicable from time to time for the 732.2 hours when the applicant was required to work beyond his normally scheduled working hours but was not recalled.

On-call and recall 109The applicant was required to provide support to the respondent's business on a 24 hours, 7 days a week basis. The applicant's job description, revised in August 2003, required the applicant to: Respond to crisis and emergency situations as required on a 24 hour, 7 day a week basis (on call)... 110The applicant regularly received directions from Vice President William Henrikson that required urgent action for aircraft security to be taken that included out of hours inspection on security, staff and aircraft. 111The applicant's contract of employment did not specifically provide for the payment of an on-call allowance or for recall payments. The contract did provide, however, that other conditions of employment not referred to in the letter of employment dated 3 May 2002 were as set out in the "FedEx policies and procedures". One of those policies was an "On-Call Policy" and the other was a "Recall Policy". The applicant did not become aware of these Policies until June 2002. It was after the applicant became aware of the Policies that he made claims for payment under the Policies. 112I have earlier described the eligibility criteria in respect of the On-Call and Recall Policies. Having regard to the On-Call policy and the eligibility criteria, it seems to me the applicant met the criteria except that a Vice President had not predetermined the applicant's eligibility for on-call. In relation to the Recall Policy the same situation applied, that is, except for Vice Presidential approval the applicant qualified for payment of a recall allowance. 113On 13 May 2003, Mr McCreath sent an inter-office memorandum to Mr Simon Patterson, the Senior Manager responsible for the Asia Pacific Security Department, stating that the On-call and Recall policies applied to the Security Department staff as: The Security department staff clearly meets the requirements for the on-call/recall program and my recommendation is that where this program is provided, our employees be enrolled. 114In about May 2003, Mr McCreath recalled having a conversation with Mr Patterson regarding the payment of the on-call allowance and recall payments to employees within the Security Department. He recalled that during this conversation words were said to the following effect: Mr Patterson: "Headquarters in Memphis have informed me that there are equity issues across the business that need to be considered. Their concern is that if we give the security guys in Asia Pacific access to these programs then there will be equity issues from a global perspective. No one else within the FedEx security departments in any other region has made a similar request. Part of the role of employees working in security is to be available to address security issues as they arise. It is already factored into their salary. I have not received any final decision yet and it is still being explored." Myself: "Ok, I will inform my work group it is still under review". 115Mr McCreath said he understood the respondent did not apply the "On-Call" and "Recall" policies to security employees because: (a) FedEx security staff were already being compensated in their overall salary package for remaining contactable as part of their duties and responsibilities; and (b) equity issues throughout the global business. For example, I understood that the business didn't want to provide access to the policies specifically in the Asia Pacific region when security employees across the global business (for example in Europe and the Americas) did not have access to the benefit. 116Mr McCreath said he did not receive any formal response to his inter-office memorandum dated 13 May 2003. He had a number of informal discussions with members of senior management in late 2003 and 2004 about the matter of the Security Department's eligibility. He understood at the time that senior management were still considering the matter. 117On or around 24 June 2004, in response to an inquiry from Mr Mejias, Mr McCreath recalled a conversation with Mr Mejias where words were said to the following effect: Myself: "As you are aware, FedEx has an On-Call and Recall policy. However, in order to receive these allowances your position needs to be enrolled in the program, meet all of the eligibility requirements and have VP approval. I am trying to get the security department staff enrolled in the program. At this stage, this has not occurred. The issue is currently being considered by senior management." 118Mr McCreath said in or around 2005, he was verbally informed by Mr Patterson that the respondent's management had considered the request for employees within the Security Department to be eligible to receive "On-Call" and/or "Recall" allowances. However, a global decision had been made that no Security Department personnel were to receive such allowances for the reasons he was given earlier, that is, employees had already been compensated in their salaries and for equity reasons. 119The so called "equity" reasons for denying the applicant access to the Recall payments and the On-Call allowance is not a basis upon which the Court would conclude that such reasons were fair in the context of the unfair contract provisions of the Act. If, of course, it was correct that the respondent had compensated the applicant by way of salary for the inconvenience of being on-call or for being available to be recalled, that would be a different matter. 120The respondent submitted: When the applicant made an application to two vice-presidents of the respondent ... it was noted that the application was rejected. ... It was noted that the applicant's "salary level and grading is competitive and so no adjustment to your salary is appropriate". That included a claim for On-call/Re-call allowance. There is no suggestion that the comment and finding that his salary level and grading was competitive was incorrect, it being based upon two "reputable compensation surveys". 121Indeed, the letter from Mr Allison to the applicant dated 15 June 2004 in response to the applicant's request for a salary review and for the payment of the On-Call allowance and Recall payments, did indicate that in the respondent's view the applicant was receiving a competitive salary and, therefore, it would not be adjusted. The letter did not mention on-call or recall, but it may reasonably be inferred the respondent considered that the applicant's salary was adequate compensation for non-payment of the allowance/payments. 122The difficulty I have is that whilst Mr Allison's letter refers to "two reputable compensation surveys" to justify its decision not to pay the On-Call allowance or the Recall payments to the applicant, the surveys were not put into evidence. There was no opportunity for the Court to examine them to determine whether the applicant was paid a salary comparable to that paid to his counterparts in other firms who were on-call or available to be recalled or to in any way test the respondent's assertions. The applicant had sought to have the respondent produce the survey information it had relied upon, which was peculiarly within the knowledge of the respondent, but nothing was produced. 123The applicant established that he was on-call and that he was available and was often recalled to duty, but was not paid in accordance with the relevant policies. The respondent did not dispute this was so, but contended that compensation for this inconvenience was included in the applicant's salary. In those circumstances the respondent had an obligation in my opinion, analogous to an evidential onus, to show what it was contending was correct, but did not discharge that onus. 124The respondent relied on the fact that the applicant's contract of employment did not provide for the payment of an On-Call allowance, nor did it provide an entitlement to Recall payments. Whilst the applicant met all of the criteria for entitlement in the relevant policies, vice presidential approval had not been given for Mr Mejias to be a beneficiary of the policies. 125However, when one comes to consider the reasons why the relevant Vice President withheld approval, the respondent's reliance on the contract of employment falls down. Because the respondent did not want to provide access to the On-Call and Recall Policies to Mr Mejias when security employees across the global business did not have access to the benefit, that is not a proper basis to refuse access if the applicant otherwise met the eligibility criteria. What the respondent was in effect putting was that, despite the merit of the applicant's claim, the reason the applicant did not qualify for payment under the Policies was because the respondent did not wish to provide the applicant with the benefit because others in the same position as the applicant did not receive the benefit. This was not really an equity issue; it was an issue about avoiding the creation of a precedent. 126The second basis for refusing access to payment under the Policies was that the applicant was compensated for the inconvenience of being on-call and available for recall through his salary. The respondent has not substantiated that contention in any way. 127If the bases of the Vice President's refusal to give the applicant access to the On-Call and Recall Policies are invalid or not substantiated, and except for the Vice President's refusal the applicant otherwise qualifies for access to the Policies, it must follow in my opinion, as a matter of fairness, that those Policies should apply to the applicant. 128I find that the contract of employment between the applicant and the respondent was unfair in that the contract permitted the respondent to avoid applying its Policies relating to On-Call and Recall to the applicant. 129I propose to vary the contract to provide that the respondent shall apply its On-Call and Recall Policies to the applicant. 130In respect of the On-Call Policy it provided for a flat monthly payment of $248 for each month the applicant was required to be on-call. The applicant claims he was on-call for 35 months. There being no cogent evidence challenging this figure, the applicant should be compensated accordingly. 131In relation to the hours worked by the applicant when he was recalled to duty, the applicant claims it was 1533.4 hours. The Court accepts that figure subject to it not including travel time. 132The respondent's Recall Policy provided that if the full-time employee worked less than two hours, the employee was guaranteed two hours payment at the "applicable" overtime rate; if greater than two hours, payment was according to the total hours worked at the "applicable" overtime rate. The Policy did not define "applicable" overtime rate. The Policy provided that travel time to and from the workplace is not included in the hours worked for the purpose of calculating the Recall payment. Where the applicant travelled outside his normal scheduled hours of work he would not be entitled to any remuneration. Where he travelled during his normal scheduled hours he would be entitled to his normal hourly rate of pay. 133The question arises as to the "applicable" overtime rate. A rate for overtime is not fixed by statute. It will depend, for most employees, on the terms of the industrial instrument that covers their employment. The applicant, however, accepted he was not covered by any industrial instrument. In those circumstances, he contended that it was appropriate to use an "award comparator" to determine what payment should be made to him for time worked in excess of 38 hours per week on recall. 134In that respect, it was submitted the Airport Employees Award 1999 (Cth) was an appropriate comparator or, in the alternative, the common rule Clerical and Administrative Employees (State) Award. The former Award in cl 24 provided, generally speaking, overtime to be paid at the rate of time and a half for the first three hours and double time thereafter, such double time to continue until the completion of such overtime work. For all work required to be undertaken by an employee outside ordinary hours on Sunday except as provided by cl 24.8 the rate of pay was double time until the completion of the overtime work. Cl 24.8 relevantly provided: 24.8.1 An employee who has performed overtime duty may, wherever practicable and with the approval of the employer, be released from duty for an equivalent period. 24.8.1(a) Where an employee, other than a continuous shift worker, is released from duty in accordance with 24.8.1 the employee shall, in respect of the period he/she is so released, be entitled to be paid at the following rate: where the period of overtime duty was from Monday to Saturday, at half time for the first three hours then single time for the remaining period of overtime worked; where the period of overtime duty was on a public holiday, at time and a half; where the period of overtime duty was on a Sunday, at single time. 135The Clerical and Administrative Employees (State) Award provided in cl 12 that overtime shall be paid for at the rate of time and one-half for the first two hours and double time thereafter. Provided that overtime at the rate of double time shall be paid for all time worked after 12:00 noon on a Saturday. 136This is not a case where the contract was designed to, or did, avoid the provisions of an industrial instrument (see s 105(1)(d) of the Act). As I have indicated, the parties both acknowledged the applicant was "award free". The only purpose of considering an award in the context of this case is to determine what might be a fair rate for the payment of overtime to the applicant under the Recall Policy. 137A fair rate, in my opinion, is that provided by the Airport Employees Award, that is, time and a half for the first three hours worked and double time thereafter on Monday to Saturday, double time for all work on Sundays and double time and a half for work on a public holiday. These rates are commonly found in most State and federal awards.

Unpaid expenses 138In relation to unpaid expenses I have done my best to ascertain the validity of the outstanding expenses claimed by Mr Mejias as identified in the affidavit of his solicitor Mr Borham. It will be recalled that in compromising his expenses claim the applicant contended his outstanding expenses totalled $16,497.26 (see Annexure A to Mr Borham's affidavit) plus outstanding mileage of $359.87 (see Annexure B to Mr Borham's affidavit), plus "Erroneous Reconciliations" $718.95 (see Annexure C to Mr Borham's affidavit), plus "Dubious Payments" $987.33 (see Annexure D to Mr Borham's affidavit), making a total of $18,563.41. 139It has not been an easy exercise to validate the applicant's claims. Nevertheless, I have examined the 164 line items in Annexure A to Mr Borham's affidavit and I have concluded that in respect of 126 of those items the amount of outstanding expenses owed to the applicant is $10,297.74 and not $16,497.26. This requires some explanation. 140Most of the 164 line items were instances where the respondent had indicated through Ms Teo that it had been unable to locate evidence of the expense incurred by the applicant. For example, Mr Mejias claimed that on 9 October 2002, he expended $318.69 at "ASIS Alexandra US" for "Security Manuals". This item was identified in line item 774 in the exhibit "RM-T1". In her second affidavit Ms Teo indicated in relation to line item 774 that she was "unable to locate any expense reports, receipts or other supporting documentation ...". Further, there was no evidence from the respondent that the claim had been paid. However, Mr Mejias' Citibank Statement for the period 10 October to 10 November 2002 indicates a transaction took place on 9 October 2002 whereby Mr Mejias made a payment to "Asis Alexandra Us" in an amount of $318.69. 141Thus, in relation to this line item the evidence was that the applicant incurred the expense and there was no evidence he was reimbursed for the expense. The respondent could not find any expense claim and it may be that the applicant, for one reason or another, did not file the necessary expense report. On the other hand, a claim may have been lodged, but it became lost in the respondent's system. This latter eventuality is on the cards because, for example, in relation to line item 287 Ms Teo indicated that she had been unable to locate any expense report, but in evidence was an expense report signed by the applicant dated 1 September 2004 for the amount claimed of $896.40. The claim had a signature indicating management approval of the claim. 142In relation to the unpaid claims, it does trouble me that the applicant had not pursued them earlier. However, given that the weight of evidence favours the conclusion that monies expended by the applicant on behalf of the respondent to the extent of $10,297.74 were not reimbursed to the applicant, it would be unfair to deprive the applicant of that amount. I have reached this conclusion notwithstanding the respondent's policy that expenses not claimed within three months were not recoverable. 143In relation to those expense claims I have rejected, I did so for a number of reasons including that: the respondent's documentation indicated the claim had been paid (for example the expense report was marked with a stamp "paid"); the receipt relied upon by the applicant was illegible; expense report not dated and signed; and no explanation by the applicant of the reason why the expense was incurred. 144The applicant claimed interest paid on his credit card account, as well as credit card fees charged by the card's provider. These were quite small amounts and I have included them in the $10,297.74. As the applicant submitted, in circumstances where his credit cards were used primarily for expenses incurred in his role with the respondent and where the respondent required the applicant to carry the burden of expenses for periods of time, it would be unfair and unconscionable for the respondent to refuse to reimburse the applicant for bank interest charged on expenses and other credit card fees. 145In relation to the mileage claims there are only two that I consider have merit that is a claim for $419.40 (line item 274) and a claim for $896.40 (line item 287). In both cases the respondent indicated there was no evidence of the claim having been made. However, claim forms for the relevant amounts were in evidence. In relation to the remaining claims, having considered the documentation I have concluded on the balance of probabilities, having regard to the respondent's evidence regarding payment, the claims have been paid. 146In relation to the "Erroneous Reconciliations" claims the applicant contended that some 33 claims had been either overpaid or underpaid but the difference was in favour of the applicant by an amount of $718.95. I have examined the documentation in relation to the underpaid claims and concluded that the applicant was underpaid an amount of $931. When the overpaid claims are subtracted from this figure the result is an amount of $617.67 owed to the applicant. I have arrived at the figure by having regard to Ms Teo's evidence as to the components that she identified as making up payments made to the applicant under a particular voucher[s] number[s] and comparing that to the amount paid into the applicant's bank account. Where I have considered it necessary I have examined the expense report and receipts provided by the applicant. Thus, for example, in relation to line items 387 to 394, Ms Teo deposed that "FedEx paid to Mr Mejias FedEx voucher numbers 00046250 and 00046235 in the sum of $530.28 on 24 January 2002." Ms Teo then most helpfully listed the components of what was said to have made up the total of $530.28, which was the amount that appeared in Mr Mejias' bank account. However, when the components are added up they do not amount to $530.28 but rather $585.28 and this latter figure is consistent with the receipts accompanying Mr Mejias' expense report. Absent any intervening fact, one is drawn to the conclusion Mr Mejias was underpaid $55 in relation to this expense. 147In relation to the "Dubious Payments" claim I find that on the balance of probabilities the amounts claimed by the applicant had been paid to him. 148I further find that in relation to expenses, the applicant is owed a total of $11,334.80. 149In circumstances where the contract between the applicant and the respondent failed to ensure that the applicant was reimbursed for all his unpaid business expenses that related to his work for the respondent the contract was unfair and I so find.

Whether applicant engaged in disentitling conduct 150The respondent referred to a number of decisions of the Court that emphasise the need to take into account the totality of the circumstances of the relationship between the parties and the totality of the interests of each of the parties: Cavacuitti v XTMCA Ltd (Toyota Motor Corporation Australia Pty Ltd) [2002] NSWIRComm 117 at [61]; Autobake Pty Ltd v Budd & Grainger (1986) 19 IR 18 at 30; Hairman v FileNET Corporation Pty Ltd [2001] NSWIRComm 318 at [92], [130]; and Gilmore v Allied Express Transport Pty Limited [2006] NSWIRComm 16 at [179] and for the applicant in unfair contract proceedings to come before the Court with "clean hands": Saliba v John Hearder Pty Ltd (1986) 15 IR 36. 151The respondent submitted that the disentitling behaviour of the applicant, both outside and within the courtroom, was of such a high order as to negate any unfairness which may have been found in the terms of the contract: This conduct has been so inglorious as to mean that the court's discretion ought not be exercised in favour of the applicant for the variation or avoidance of the contract and in the ordering of any compensation. 152The matters relied upon by the respondent for this submission were the following: (a) the applicant has been revealed as having been a shrewd entrepreneurial person who was a qualified security consultant holding a Diploma in Investigations and Security Risk Management and/or Diploma in Private Investigations through the Australian College of Private Investigators. At various stages the applicant studied law and for a Masters of Business Administration at Curtin University; (b) the applicant was well rewarded for the work he first had performed for the respondent as a Collection Specialist and later as a Collections Manager. By his own decision, the applicant sought to obtain the Security Specialist role even though it paid less than the earlier managerial role he held in collections. In the new role of Senior Security Specialist the applicant was well remunerated and received annual and regular increases to remuneration. The applicant, in the Security Specialist role worked with great autonomy. His supervisor was situated in the Philippines and had to supervise the applicant either by email or telephone. He had to largely accept the applicant's advice as to the hours he worked. Aspects of the evidence given by the applicant in relation to his working role have to be seen as highly implausible. This is a person who when travelling didn't read a book, didn't read a magazine, didn't read a newspaper, didn't watch the movies, didn't have an alcoholic drink on a flight, all the while he said he had his laptop open and working; (c) the applicant was well aware, having signed the contract, that overtime did not apply to it, particularly a person who had been pursuing legal studies and had studied the subject "contracts", he was aware that the words in the contract were very important. The contract specifically said that overtime would not be paid even though it was required from time to time. There can be no assertion that the applicant was under any disability in not being able to understand the contract which he entered. The applicant at no stage, similar to authority of Saliba, told anybody at the respondent during the course of the contract that he intended to claim overtime as he anticipated bringing s106 proceedings. He just secretly stored a potential s106 claim up and set about to establish his own business clandestinely using the respondent's time and resources; (d) regard should also be had to the applicant's behaviour found to have occurred in the decision in relation to unfair dismissal before Commissioner Ritchie, together with the behaviour which led to contempt proceedings being brought as a result of the breach of an undertaking given to Commissioner Ritchie in those proceedings. One also needs to take into account that the applicant was ordered to pay to the respondent $39,000.00 for costs in relation to contempt proceedings and that amount of money still remains outstanding, despite being ordered to be paid in 2007; (e) the circumstances of the applicant's dismissal related to him setting up his own business during work hours without the knowledge and approval of his employer and also providing services to a third party during the course of the period of engagement with the respondent. Any suggestion that the applicant says that he did the work for Menzies Aviation in his own time lacks credibility, keeping in mind that Menzies Aviation was the landlord of the respondent's premises from where the applicant worked in Sydney. To believe the applicant most of his working hours were devoted to the respondent. The applicant did not seek any prior approval from anyone in the authority of the respondent in relation to what he was doing; (f) the applicant's evidence in relation to his business called Customoz as to when it was set up and as to whether or not it had a website defies belief. In addition to the installation of the locks at Menzies Aviation, the applicant also offered an ongoing maintenance contract with that company, all of which were in a conflict of interest to his own duties to the respondent as found by the findings in the decision of Commissioner Ritchie; (g) the applicant's suggestion in the witness box that he did not know what the expression to "administer a website" equally lacks any weight, keeping in mind the extensive web-based business which the applicant set up prior to leaving his employment with the respondent and which he continued thereafter. The applicant's evidence as to why he set up his own business without the knowledge of the respondent is unconvincing on the basis that he was unhappy with various issues with the respondent. As a consequence, this was a way of earning more money. The applicant's evidence that he only used his laptop to access personal emails on three or four occasions beggars belief in the face of the evidence. He says personal emails were with the address of Customoz; (h) the applicant at one stage says he earned $5,000.00 from Menzies Aviation, although the bank statement suggests it was in the order of approximately $7,400.00. The applicant is not able to point to any of his tax returns in the relevant tax year to identify that that money was declared as income for personal services, even though he said Customoz was the trading name of the applicant himself; (i) the Commission should also find it to be most unsatisfactory the applicant's use of another name, that of Ricardo Gonzales. The applicant's explanation for that name's case and existence, with respect, is unconvincing, particularly when that particular person was the registered owner of the Australian Business Number for a period of 3 years whilst he was working for the respondent. The ABN was subsequently taken over by the applicant in the name identified in these proceedings, Ric Mejias. It begs the question whether the applicant's double Ricardo Gonzales was trading independently of Ric Mejias. It raises a strong inference that the applicant's other persona was a convenient mask to wear for his other activities and whether there is considerably more financial information available as earnings during the period of service with the respondent; (j) when the applicant says he only did work for Menzies Aviation, he does not adequately explain other names which appear in his bank statements at or about the time he was working for the respondent, that is of entities called General Fastener and Raymar. An exhibit of the applicant will identify that those companies were clients of Customoz. When asked if there was a bank account in Ricardo Gonzales, rather than saying a direct no, the applicant said, "I don't believe so." In relation to explaining why certain things are not in his tax returns, the applicant says the returns were prepared by his accountant. That answer neglects to acknowledge that notwithstanding whether one's tax return has been prepared by one's accountant, the taxpayer is responsible for the accuracy of the information contained within it. (k) the applicant used the name Ricardo Gonzales for three years by way of the Australian Business Number, whilst he was working for the respondent. When asked whether he had any credit cards in the name of Ricardo Gonzales he said, "I'd have to have a look", rather than being a unequivocal "No". It is recognised that the applicant was in middle management and he says that even though he is not a witness to middle management jobs he could not identify whether overtime rates applied to such positions. Certainly overtime was not paid with his subsequent employer JVH Communications, where he was earning $80,000.00 a year from mid 2005 onwards. (k) in proceedings before the Full Bench the applicant was convicted of contempt and needed to have a hearing on penalty. The first proceedings on liability are found in Industrial Registrar v Mejias [2007] NSWIRComm 145; (2007) 165 IR 425 and the second penalty proceedings are found at Industrial Registrar v Mejias (No 2) [2007] NSWIRComm 253; (2007) 166 IR 230. The Court made serious findings of misconduct. 153The respondent submitted all of these matters needed to be looked at very seriously and carefully weighed by the Court. The applicant, it was submitted, has already committed a proved abuse of the industrial relations system. He had not paid the costs he was ordered to or made any attempt to do so. He did not come to these proceedings with "clean hands". The Court's discretion ought not be exercised in his favour. 154The problem with most of the matters raised by the respondent as to why the applicant's conduct disentitles him from orders being made in his favour is that whilst they might raise tantalising issues with the potential to impugn the applicant they do not cross the threshold of proof on the balance of probabilities. 155The fact that the applicant might have been a "shrewd entrepreneur" (although on the evidence I would find it difficult to reach such a conclusion) and held certain qualifications, seems to me to be of no relevance. 156The asserted implausibility of the applicant working the whole time he was travelling runs up against Mr McCreath's evidence that he had no basis to doubt that the applicant did other than work the hours he claimed he worked. But, in any event, the view I recorded earlier was that travel time outside the applicant's normal scheduled hours was not working time. 157The next contention was that the applicant "just secretly stored a potential s 106 claim up and set about to establish his own business clandestinely using the respondent's time and resources". There is simply insufficient evidence to support this assertion. The applicant kept accurate records of the hours he worked because the respondent required him to keep a calendar to that effect. Moreover, as he submitted, he repeatedly complained about the number of hours he was working. The fact that he kept bank and expense records to the extent he did is not surprising given that he often purchased goods and services on behalf of the respondent. 158In relation to the proceedings before Ritchie C, the Commissioner held that the actions of the respondent in summarily terminating the applicant were not harsh, unjust or unreasonable. The Commissioner found that the applicant misused his position to gain work for his private company without seeking approval from the respondent. The applicant also used the equipment of the respondent to monitor work on behalf of his private company website without seeking approval from his manager. Both actions were contrary to the respondent's particular policies. 159It was observed in Westpath Services Pty Ltd v Joseph at [71] that the equity principle of "clean hands" operates within a narrow sphere and does not result in any wrongful conduct (especially if not connected to the relief claimed) becoming a bar to the granting of orders if unfairness is otherwise established. If it had been shown by the respondent that the time the applicant spent working for his private company whilst employed by the respondent was such that the excessive hours the applicant claimed he worked was an exaggeration, or was claimed in a way that was fraudulent because the time had been spent on the applicant's own business, then there would obviously have been a connection between the wrongful conduct and the relief claimed. That would have been disentitling conduct. 160The applicant denied that the applicant's private work for Menzies Aviation of installing locks, which was the subject of the unfair dismissal proceedings, was completed during the respondent's time. Further, there was evidence in the unfair dismissal proceedings and further confirmed by the applicant's calendar that the applicant was interstate on the days the three locks were installed. The applicant hired sub-contractors to complete the installation of three locks for Menzies Aviation. This evidence is uncontradicted. 161Ritchie C referred to evidence that showed that the applicant's work computer registered that the word "CustomOz" came up 1009 times. "CustomOz" was set up by the applicant as a private company for the purpose of installing security equipment. It was this company that the applicant used to install the locks at Menzies Aviation. The work computer was a laptop. There was no evidence to show that the applicant used the laptop 1009 times during his scheduled working hours for purposes inimical to his employment. It may have been the laptop was used outside normal working hours. Moreover, the applicant in his evidence in these proceedings conceded he accessed his personal email account (which doubled as his work email) - ric@customoz.com - about three or four times during working hours. There was no evidence to contradict this. 162The respondent submitted the Court should find it to be "most unsatisfactory the applicant's use of another name, that of Ricardo Gonzales." This was particularly so, it was submitted, when Ricardo Gonzales was the registered owner of the Australian Business Number ("ABN") for a period of three years whilst the applicant was working for the respondent. The respondent observed that the ABN was subsequently taken over by the applicant in the name identified in these proceedings, Ric Mejias. The respondent submitted that this begged the question whether the applicant's "double", Ricardo Gonzales, was trading independently of Ric Mejias and that it raised a strong inference that "the applicant's other persona was a convenient mask to wear for his other activities and whether there is considerably more financial information available as earnings during the period of service with the respondent". 163Without more, the proposition that the use by the applicant of the name Gonzales cannot raise "a strong inference" that in doing so the applicant was masking his private business activities whilst working for the respondent. The applicant submitted, and the uncontradicted evidence bears this out, that: (a) the applicant's birth name is Ricardo Gonzales Mejias, but that he goes by the name Ric Mejias; (b) the applicant was unaware of any bank accounts in the name of Ricardo Gonzales, but would have had an account in that name while at school; (c) Ricardo Gonzales had only one ABN, being the same ABN as Ric Mejias; (d) Ricardo Gonzales has only one tax file number, the same tax file number as Ric Mejias, and submitted the same tax return as Ric Mejias; (e) the respondent knew the applicant as both Ric Mejias and Ricardo Gonzales; (f) Ricardo Gonzales and Ric Mejias are the same person; (g) the applicant had not at any time conducted any business or carried out any transactions pretending to be someone other than Ric Mejias. 164The respondent submitted that whilst the applicant stated he only did work for Menzies Aviation, he did not adequately explain other names which appeared in his bank statements at or about the time he was working for the respondent, that is of entities called General Fastener and Raymer. The applicant's evidence in this regard was that he did not have any companies other than CustomOz that he was using to trade in 2004/2005, that CustomOz was a small business in the 2004/2005 financial year, and only did one job for Menzies Aviation, that Raymer Business Service Pty Limited was his accountant and that he allowed a neighbour (trading under "General Fastener") to reimburse him by payment into the applicant's bank account for security equipment ordered for the neighbour by the applicant. This evidence was uncontradicted. 165The respondent contended the Court needed to take into account that the applicant was ordered to pay to the respondent $39,000 for costs in relation to contempt proceedings and that amount of money remained outstanding. The respondent was referring to proceedings before Marks J in Federal Express v Mejias [2005] NSWIRComm 474 and Federal Express v Mejias (No 2) [2005] NSWIRComm 481 and the proceedings before the Full Bench in Industrial Registrar v Mejias (No 2) [2007] NSWIRComm 253; (2007) 166 IR 230. 166Apparently, in 2007, the respondent served the applicant with a bankruptcy notice in relation to the $39,000 in costs owed by the applicant to the respondent. According to the applicant's evidence that bankruptcy notice was set aside on the basis of defects in the notice and the prospect of a set-off arising out of the present proceedings. As far as I am aware, the respondent has taken no further steps to obtain the $39,000 owed to it. In the event that compensation is awarded in these proceedings, it will be open to the respondent to resume its pursuit of the debt owed. 167The respondent referred to the misconduct by the applicant identified in the contempt proceedings before the Full Bench in 2007. The Full Bench found the respondent threatened to publicly disclose sensational, damaging and confidential material adverse to the interests of the respondent and contrary to the agreement he had entered into on 25 May 2005 before Ritchie C. The Full Bench concluded that such action constituted improper pressure. The Full Bench found Charge A was proven, namely, there was a "threat of detriment to Federal Express so as to put improper pressure upon a party to the proceedings to settle the proceedings." 168The Full Bench has dealt with the conduct of the applicant in relation to contempt. The Full Bench stated at [13]-[18]: [13] The offence was objectively serious, albeit not amounting to contumacious contempt. It involved the respondent placing improper pressure on his former employer to settle unfair dismissal proceedings by sending a communication threatening detriment to the former employer if it did not settle, thereby tending to interfere with the due administration of justice. The nature and quality of such an offence, absent significant mitigating factors, would normally attract a substantial penalty to mark the Court's strong disapproval and to deter others. [14] There are, in this case, very significant mitigating factors. We accept the evidence as to the respondent's mental state at the time of the offence and the debilitating effect it had on his capacity to make rational judgments about the position in which he found himself. We also accept the respondent's apology to the Court, which we regard as having been genuinely offered. The respondent is sincerely remorseful. He was obviously distressed in making his statement to the Court and it is apparent he now realises the enormity of the consequences of his mistake, which includes the impact on him and his family, emotionally and financially. [15] There is nothing to suggest the respondent is other than a person of good character and it would appear that the respondent's conduct in committing the contempt was out of character. We consider it is most unlikely he would re-offend. The respondent has no previous convictions. [16] Because of his conduct since the termination of his employment, and which ultimately led to him being found guilty of contempt, the respondent finds himself in difficult financial circumstances. He has accumulated a debt of the order of $39,000 for the legal costs of Federal Express. He has fallen substantially behind in his mortgage payments and been forced to rely upon his family for financial support. He has been served with a bankruptcy notice in relation to the debt. [17] In all of the circumstances, justice would not be served by this Court inflicting punishment on Mr Mejias. He has managed to cause himself sufficient misery. We consider the circumstances before the Court manifestly demonstrate that the requirement of deterrence has been adequately satisfied. Moreover, whilst it is not clear whether any conviction recorded against him would disqualify him from holding a licence under the Security Industry Act and relevant Regulation, we do not see any purpose to be served in placing the respondent's livelihood in jeopardy. Accordingly, we propose to order that the charge against him be dismissed pursuant to s 10(1)(a) of the Crimes (Sentencing Procedure) Act. In taking this course we note that the respondent is subject to the continuing operation of non-publication orders. We consider it is appropriate to accept a written undertaking to the Court that the respondent will not engage in any correspondence or communication with Federal Express or any employee of Federal Express in connection with proceedings within the jurisdiction of the Industrial Relations Commission of New South Wales other than through any legal representatives who have filed a Notice of Appearance in the proceedings. [18] We have considered the question of costs. The applicant's concession on costs was a commendable gesture but we have decided, in the particular circumstances of this case, that with the respondent already indebted to the extent of $39,000 in legal costs that he is unable to pay, in the exercise of our discretion we should make no order as to costs. 169I do not consider it is open to me to revisit the Full Bench's findings and to now impose what would, in effect, be a penalty by holding the applicant's contempt conduct disentitled him from relief in relation to an unfair contract. 170The respondent, nevertheless, noted that in the contempt proceedings the applicant had given evidence that the loss of his employment with the respondent, the unfair dismissal proceedings and the cost orders made against him had caused a devastating impact upon him financially and emotionally. He had fallen substantially behind on his mortgage payments and been forced to rely upon his family and wife for financial support. It had been a most distressing and difficult experience for him. 171In relation to this evidence the respondent submitted that the applicant in the liability proceedings for contempt had filed an affidavit and was not subject to cross-examination. In the proceedings on penalty, the applicant made an unsworn statement to the Court. The respondent submitted that nowhere within either of those proceedings did the applicant reveal his $80,000 a year income from a position he obtained with JVH Communications in 2005. The impression which the applicant was trying to convey in order to mitigate penalty before the Full Bench, it was submitted, was that he had only been earning a couple of hundred dollars a month in his web-based business. 172The difficulty with this submission is that the applicant left the employment of JVH in about June 2006 after working with the company for about 12 months. The applicant was not working for JVH and earning income from that employer in May 2007 at the time of the contempt proceedings. It could not be concluded the applicant misled the Full Bench. 173None of the conduct by the applicant amounted to the disentitling conduct alleged by the respondent.

Compensation 174Section 106(5) of the Act provides that in making an order the Court may make such order as to the payment of money in connection with any contract declared wholly or partly void, or varied, as the Court considers just in the circumstances of the case. 175As to the 732.2 hours that the applicant worked in excess of 38 hours per week, but was not recalled I have already found that the applicant should be compensated by an amount that is calculated by multiplying 732.2 by the applicant's hourly rate that applied from time to time over the course of his employment. 176In relation to the On-call allowance the applicant shall be paid 35 months multiplied by $248. 177In relation to the hours worked when the applicant was recalled to work, he shall be paid an amount calculated in accordance with the provisions of the Airport Employees Award 1999, namely, time and a half for the first three hours worked and double time thereafter on Monday to Saturday, double time for all work on Sundays and double time and a half for work on a public holiday. The rate of pay shall be the applicant's hourly rate that applied from time to time over the course of his employment. 178In relation to unpaid business expenses the applicant shall be paid an amount of $11,334.80.

Summary of Findings 179The Court's findings may be summarised as follows: (1) the following matters relevantly constituted elements of the contract of employment between the applicant and the respondent: (a) the applicant was employed by the respondent in the position of Senior Security Specialist and commenced that employment on or about 20 May 2002; (b) the position was graded "27" with a commencing base salary for the position of $69,636 per annum, reviewed annually and adjusted in accordance with the applicant's performance at the respondent's discretion. By April 2005 the salary had increased to $78,386 per annum; (c) the applicant's position reported to the Manager of International Security in the Philippines; (d) the applicant's area of responsibility was Australia, New Zealand, Solomon Islands, Vanuatu and Fiji. His duties involved investigations of allegations for theft, fraud or misconduct by other employees of the respondent, policy development, implementation in relation to security and loss prevention and liaising with government authorities such as the Department of Transport and Regional Services, Australian Customs Service, Australian Quarantine, Inspections Service and National Crime Authority and Federal and State Police; (e) the employment of the applicant was on a "permanent full-time basis"; (f) the contract provided that the applicant would be required to work no less than 38 hours each calendar week. Those hours were subject to change depending on business needs. The applicant was to take time off in lieu where he worked beyond his normal scheduled hours; (g) the applicant might be required to work overtime from time to time. No payment was to be made for overtime worked; (h) travel and accommodation expenses were to be reimbursed by the respondent; (i) other conditions of employment not referred to in the letter of employment dated 3 May 2002 were as set out in the "FedEx policies and procedures"; (j) from August 2003, the applicant was required to "respond to crisis and emergency situations as required on a 24 hour 7 day a week basis"; and (k) termination of employment could occur by the giving of one week's notice or by payment of one month's pay in lieu of notice. (2) the applicant worked an average of 86.7 hours per week, more than twice the stated hours in his contract of employment; (3) in permitting the applicant to work excessive hours without adequate compensation the contract of employment between the applicant and the respondent was unfair; (4) the contract was also unfair in that it failed to ensure that the applicant was able to take reasonable time off in lieu for additional hours worked outside his ordinary hours of work; (5) the contract should be varied to provide for payment to the applicant for time worked in excess of 38 hours per week; (6) the applicant should be paid his ordinary hourly rate of pay applicable from time to time for the 732.2 hours when the applicant was required to work beyond his normally scheduled working hours but was not recalled; (7) the contract of employment between the applicant and the respondent was unfair in that the contract permitted the respondent to avoid applying its Policies relating to On-Call and Recall to the applicant; (8) the contract should be varied to provide that the respondent shall apply its On-Call and Recall Policies to the applicant; (9) the applicant should be paid $248 for each of the 35 months he was required to be on-call; (10) the applicant was recalled to duty for a period of time totalling 1533.4 hours subject to that figure not including travelling time; (11) the applicant shall be paid for the time he was recalled to work overtime at the rate of time and a half for the first three hours worked and double time thereafter on Monday to Saturday, double time for all work on Sundays and double time and a half for work on a public holiday. The rate of pay shall be the applicant's hourly rate that applied from time to time over the course of his employment; (12) in failing to ensure that the applicant was reimbursed for all his unpaid business expenses that related to his work for the respondent the contract between the applicant and the respondent was unfair; (13) the contract should be varied to require the respondent to reimburse the applicant for all his unpaid business expenses that related to his work for the respondent; (14) the applicant shall be paid an amount of $11,334.80 for unpaid business expenses.

Directions 180The applicant is directed to prepare short minutes of order reflecting the findings in this matter. The applicant is to confer with the respondent for the purpose of obtaining its consent to the short minutes. The applicant shall provide the short minutes of order to the Court, whether the short minutes are by consent or not, at a hearing at 10.00 am on Thursday 15 November 2012. In the event there is disagreement about the terms of the short minutes the Court will hear the parties as to their respective positions and determine what final orders are appropriate. 181The Court apprehends there may be differences between the parties regarding the question of costs that raise issues as to whether orders other than the usual orders should be made. The parties shall file a written outline of submissions regarding costs by 4.00 pm on Wednesday 7 November 2012. The Court will hear oral submissions on costs in the proceedings scheduled for Thursday 15 November.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 October 2012