1 This is an application by Helen Miriam Ross for unfair dismissal against A E R Pty Ltd pursuant to section 84 of the Industrial Relations Act 1996.
2 Ms Ross was employed from 31 May 1999 as a clerk grade 3 on a part-time basis pursuant to the Clerical and Administrative Employees (State) Award. There was some additional duties added to her job as well as a variation in hours. There were no performance issues and indeed she had what was described as a very good relationship with her employer. On the morning of Monday 22 September 2003 her employer, Mr Les Rawnsley approached her in the carpark as she arrived for work and terminated her employment. He provided no reasons for doing so.
3 On the Friday following Ms Ross was issued with an Employment Separation Certificate which described as the reason for the termination of her employment, "conflict of interest between employee and boss of bookkeeping issues". The Employer's Reply to her application for unfair dismissal provided her with a detailed outline of the reasons for dismissal for the first time.
4 The reasons for dismissal included non-provision of accounting detail to the respondent despite repeated requests, rudeness to Mr Rawnsley's wife, improperly and without permission drawing petty cash in respect of personal expenses since at least July 2002, continual refusal to accede to the employer's request to provide financial records or passwords to access the computerised system, the removal of a ducted vacuum system from the employer's premises without payment, disclosure of financial and other business records to the applicant's husband.
5 It is obvious that dismissal without the provision of reasons and without any prior history of warnings is procedurally unfair.
6 Mr Fox conceded that in this case the respondent carries the burden of proving that the dismissal of the applicant was not harsh, unjust or unreasonable. The standard of proof required when an employee is dismissed for criminal conduct is well established, being the civil standard, not the criminal standard. In Pastrycooks Employees, Biscuit Makers Employees and Flour and Sugar Goods Workers Union v Gartrell White [No.3] (1990) 35 IR 70 at 83-84, Hungerford J, said:
It is undoubted, in my view, and as Mr Walton conceded, that the onus for making out a case to warrant the intervention of the Commission in ordering reinstatement is on the claimant union: see Re Barrett and Women's Hospital Crown Street [1947] AR (NSW) 565; Re Municipal Employees, Greater Newcastle (Wages Division) Award (Re Wallace) [1949] AR (NSW) 868; Western Suburbs District Ambulance Committee v Tipping [1957] AR (NSW) 273 at 279 and Homebush Abattoir [1966] AR (NSW) at 386. However, it is also undoubted, in my view, that where an allegation of misconduct is raised as a defence or as justification for a particular course of action by an employer, such as in summarily dismissing an employee, then the legal burden, in an evidentiary sense to establish that fact, shifts from the union to the employer: see WD & HO Wills (Australia) Ltd v Jamieson [1957] AR (NSW) 547 at 552, 553; North v Television Corporation Ltd [1976] 11 ALR 599 at 602; Flynn v JC Hutton Pty Ltd (1982) 3 IR 413 at 414; Williams v Printers Trade Services (1984) 7 IR 82 at 84; and Wallace v Deering Auto Electrics (1985) 12 IR 34 at 35.
7 Whilst the standard of proof in unfair dismissal cases requires that matters be proved on the civil standard and not on the criminal standard it is necessary in cases where, as here, dismissal is for criminal conduct, that the balance must weigh more heavily in favour of the allegation of misconduct than would otherwise be the case.
8 In Wang v Crestell Industries Pty Ltd (1997) 73 IR 454 at 463-4, a Full Bench of the Commission said:
The principle applicable in relation to the onus and standard of proof in a reinstatement case concerning summary dismissal for serious misconduct involving criminal activity by the employee is that the employer must establish, to the reasonable satisfaction of the Commission, that the employee was guilty of the misconduct alleged. The onus of proof in such a case is on the employer and the standard of proof must be such as to enable a positive finding that the misconduct occurred. The standard is, of course, the civil and not the criminal one, but the requisite degree of satisfaction must have regard to the seriousness of the alleged conduct and the gravity of the consequences of the finding. The satisfaction must be such as to warrant a positive finding of the type referred to by the High Court of Australia in M v M (1988) 63 ALJR 108 and by Dixon J in Brigginshaw v Brigginshaw (1938) 60 CLR 336 at 362. See also Shop, Distributive and Allied Employees' Association, NSW Branch v Jewel Food Stores (1987) 22 IR 1 and Coles Myer Ltd v Shop, Distributive & Allied Employees Association (NSW) (1989) 27 IR 299.
We should further observe that the evidence in a reinstatement case involving criminal activity may well establish that the employee was guilty of conduct which, whilst falling short of criminal conduct, nevertheless constitutes serious and wilful misconduct justifying dismissal and refusal of reinstatement.
9 If proper procedure had been followed there was no possibility of any alternative outcome having been reached if the respondent's evidence is to be taken as fact. Mr Rawnsley, the owner of the business, gave evidence that there were serious performance issues and that substantial monies had been taken from the business for Ms Ross' personal use. On the other hand the applicant's evidence was that no improper action had taken place. She said that she took part of her salary in cash on the request of the respondent, because of cash flow problems in the business. She said that she noted all of the cash available to her originally in the wages book and then in what she called a "cash ledger". Ms Ross also acknowledged that she was responsible for preparing the group certificates of the respondent and that in 2002 and 2003 she prepared and authorised, by her signature, her own group certificate. She claimed that cash was taken out of the business by Mr Rawnsley and by another employee, Mr Brace and that no records were kept except those which she kept herself in regard to payments to herself. She claimed that casual employees, including Mr Rawnsley's son, were paid by cash from time to time.
10 Mr Rawnsley's version of events was that Ms Ross agreed to take a reduction in wages to assist in the company's cash flow. He said this was reflective of their very good working relationship and that he had always intended to make it up to her. He did in fact provide air conditioning system to her home and various electrical work. He said that he took cash from the business as his own wages and always to the amount equivalent to what was recorded on the books as his wages. He said that he had paid no-one cash in hand except to the amounts recorded in the business records or as he expected were recorded in the business records by Ms Ross.
11 In this case it is necessary to determine whether to accept the evidence of the applicant or the evidence of the respondent as they are both mutually exclusive. Before doing so it is useful to examine the evidence presented by other witnesses.
12 The affidavit of Brinley Brace was accepted into evidence without the requirement for his attendance. It was limited to a description of an incident in the work place on Friday 19 September 2003 when Mr Rawnsley's estranged wife attended the work place. Mr Brace overheard the end of a conversation between Mrs Shirley Rawnsley and the applicant, describing Ms Ross as "stressed and emotional". He then heard Ms Ross tell Mr Rawnsley over the phone to "get your butt back to the office as I do not want to be caught in the middle of your domestic problems". Mr Rawnsley returned to the work place a short time later and after a few words with Ms Ross, Ms Ross left for the day.
13 There was nothing in Mr Brace's evidence that was contradicted by that of anyone else. Unfortunately it goes no further than a brief description of the events surrounding the incident and does not assist the Commission to determine the question at hand.
14 Evidence of Mr Colin Ross, Ms Ross' husband, described a developing business relationship between himself and the respondent. He said:
At the time of my wife's dismissal, I had not received any remuneration as agreed. I estimate my commission would have been approximately $800.00 in existing sales and $500.00 in prospective sales.
15 Under cross-examination, Mr Ross conceded that there was no firm agreement between himself and the respondent about the rate of commission or that he would receive commission, he had not provided a draft written agreement to Mr Rawnsley although he had undertaken to do so, and he did not know if any sales took place that could have caused remuneration to be owed to him. In short, there may have been no remuneration owing.
16 If Mr Ross' purpose in providing his affidavit evidence was to undermine Mr Rawnsley's credibility then he failed to attain that goal. Rather, his oral evidence showed that his affidavit evidence was unfounded and only served to discredit himself.
17 Mr Ross' further evidence was a description of events following the incident on 19 September when he described his wife arriving home "in a very distressed state". Similarly, he described his wife's phone call to him after her dismissal on Monday 22 September 2003 and Mr Rawnsley's refusal to provide reasons for the dismissal when Mr Ross attended the work place to pick up his wife.
18 As to the evidence of the applicant, Ms Ross admitted that:
· She was solely responsible for the bookkeeping, the wages records and the banking for the respondent.
· From 29 January 2001 to about 30 June 2001 she paid herself $50.00 a week cash in hand, having reduced her recorded weekly payments by the same amount.
· From about 1 July 2001 until the termination of her employment, she took $100.00 a week cash, further reducing her recorded weekly wage.
· She produced and authorised group certificates on behalf of the respondent including them only the wages recorded and excluding the cash in hand amounts.
· She kept her own weekly tally of the cash payments sometimes taking amounts equal to receipts provided for personal expenses and sometimes simply writing "cash taken" for amounts up to $12,000.00.
19 Ms Ross said that she took cash on Mr Rawnsley's request because of the problems with cash flow in the business. Each week she recorded the amount "owed" to her and took the actual cash when it became available. The business had many cash transactions but the amount available varied, particularly on a seasonal basis, she said. Ms Ross claimed that Mr Rawnsley frequently pocketed cash and also paid cash to Mr Brace and to some casual workers including Mr Rawnsley's son.
20 Mr Rawnsley in response denied ever requesting Ms Ross to take cash payments. He said he did not approve the payments or have any knowledge of them. He had no knowledge of the so called "cash ledger" kept by Ms Ross. Mr Rawnsley said that all wages were paid in cash in accordance with the records kept by the business and that any cash taken by himself was equivalent to his wages. He said that the business always had a cash flow problem and that Ms Ross accepted a reduction in pay to assist the business. Acknowledging that she enjoyed the flexibility of working for the respondent and that Mr Rawnsley would "quote repay her, in some way, as and when I could". She had received, he said, in May 2002 an air conditioning system installed in her home worth approximately $6,000.00. She had also received electrical work worth about $2,000.00 in June or July 2003.
21 There were also issues between the parties about the development of other business interests. Mr Ross provided toner cartridges for photocopiers, printers and faxes to the respondent. He also became involved in the supply of ducted vacuum systems, a sideline to the respondent's primary business of supply and installation of air conditioning systems. Without repeating the detailed evidence provided on this issue, I am satisfied that the business relationship between Mr Ross and the respondent was peripheral to and not a cause of the termination of the employment relationship.
22 Ms Ross did the respondent's payroll since August 1999. Payroll records were kept manually for each of the five or six employees of the respondent. Mr Rawnsley said he had never seen the payroll records until after Ms Ross' dismissal. Mr Rawnsley said he did not know of the allocation of $50.00 cash per week to herself. From 4 July 2002 Mr Rawnsley said that Ms Ross was paid $100.00 a week car allowance because of her use of her own vehicle for banking and to visit customers in their homes to carry out "surveys". He said:
Accordingly, I agreed to a $100.00 per week car allowance being paid to Helen. My reasoning was that the company was already paying Helen's petrol expenses, although I did not at the time know the full extent of those expenses, and payment to her of a car allowance would remove the need for her to be reimbursed for those expenses. Furthermore, I valued the contribution which she made to the company and I acknowledged that she had previously taken a pay cut during hard times and I saw this, in part, as an increase in her wages which would go some way towards restoring her previous level of wages.
As I understand it, whether a $100.00 was paid by way of an increase in wages or as a car allowance, it made no difference to the company. Again, as I recall it, it was Helen who said to me words to the effect: " I have spoken with John Dorrington [the accountant] who says it's better for me to take it as a car allowance." I agreed and thought no more of it.
23 Mr Rawnsley said he was not aware that Ms Ross continued to reimburse herself for petrol out of petty cash while receiving the car allowance.
24 Mr Rawnsley's explanation contrasts sharply with that of Ms Ross who said that the $100.00 payment was a cash offset to the reduced recorded wage, in accordance with an agreement reached between Mr Rawnsley and herself. She said she was authorised to claim petrol expenses including for personal use, from petty cash.
25 Ms Ross claimed that the $100.00 weekly cash payments were recorded by her in a "cash ledger" that was always readily available to the respondent. I have a number of concerns about this statement. The "cash ledger" was a series of small loose pages which were kept under Ms Ross' calculator where they would not have been seen by anyone else including anyone using her desk. They were not kept in a ledger as such. They were never shown to Mr Rawnsley. They did not form part of the official business records. Further, in the "cash ledger" the payments were offset against petty cash dockets for items such as batteries, Panadol, cleaning products, fuel, paper towels, milk, stationery and so on. Ms Ross provided detailed evidence about petty cash. It seems extraordinary to me that Ms Ross would take petty cash out of her own "kitty", as she called it, rather than out of the business' petty cash if any of these were truly business expenses and the "kitty" was money due to her in lieu of wages. If she believed the money was hers because of some agreement reached with her employer, no other justification for taking the cash would be required.
26 From 23 November 2001 a number of entries in the "cash ledger" simply show "cash taken". Other entries show "leave loading" although the amounts shown bear no relativity to loading applicable to any relevant period of annual leave, and Ms Ross could not offer any explanation as to how these amounts were calculated. The entries relating to leave loading, in particular, appear to be fabrications for the purpose of justifying Ms Ross taking money from the business.
27 There is a difference between the parties as to whether or not electrical work at Ms Ross' home had Mr Rawnsley's prior approval. I make no further comment on this because it does not impact on whether or not there was any unfairness in the dismissal.