Paul Bodourian v Hills Industries Pty Ltd [1995] IRCA 287

pitting in the door and it needed replacement. He led the customer to believe that the door had to be replaced because it was emitting rays. The applicant advised her that it was not worth the outlay to repair the unit and she should get a new one. He also told her that if she continued to use the unit it could have caused a fire, and showed her something which had burnt out on the unit. Mrs Morris said she did not see him remove any parts or replace parts from the unit and she was unaware that this had occurred. After she was told of the expense of obtaining repairs she made the decision on the spot to buy a new unit and said she may have asked the applicant whether he could get rid of the unit for her. She denied saying that she had a limit of $300. She denied there was any explosion. She said did not recall him being pressed for time and was unaware that he had to retrieve parts from the unit. She paid a $79 fee for the call. After the applicant took the unit away Mrs Morris discussed what had happened with her mother as her mother had a similar unit. Mrs Morris formed the view that she may have a warranty claim against the manufacturer Sharp Corporation. She contacted the manufacturer and advised it that the unit had been removed by the respondent's technician. Sharp then contacted Mr Bill Stewart, the service manager of the respondent. Stewart was responsible for the applicant and other service technicians employed by the respondent. He had been located at the Dandenong branch but shortly prior to this incident was working at the applicant's branch at Elsternwick. His job was to provide technical assistance to the respondent technicians and fill in for branch managers. Upon being called by the manufacturer he investigated the job card of the respondent and ascertained that the applicant had performed the job. The job was recorded in the respondent's system as having been completed. Stewart then contacted the applicant on the phone to ascertain from him the fate of the oven. The applicant gave evidence that he explained to Stewart what had happened and in particular how he had taken the oven home to retrieve his parts and dispose of it on behalf of the customer. Stewart replied that he could not understand why he had taken away the oven and said that it should be returned to the workshop. He said he would refer the matter to Mr William Ryal, the State Divisional Manager of the respondent. Stewart's version of the phone call was that when he asked the applicant about the oven, the applicant advised him that he had taken the oven home and was fixing it for the customer. Stewart then told him to bring the oven to the workshop. The applicant then said he had blood in his throat and the conversation ceased. The applicant was absent from work for the next two days. He produced a medical certificate for that period. The Kaufmann Service Call The second incident the subject of these proceedings involved a customer, Mrs Kaufmann. She had sought a service call from the respondent to check her microwave oven for leakage. The applicant attended with a measuring device he had obtained from the workshop. He inspected the unit and found that the reading was off the scale. He then rang his branch manager Mr Barratt. Barratt advised him to advise the customer not to use the unit and to bring it into the workshop for testing. In evidence the applicant stated that after receiving this advice from Barratt he returned to the unit and pulled the plug out from the wall. He did this because the customer had said she was going to continue to use it. He then arranged to take the unit to the workshop. The service call occurred on a Friday, and Mrs Kaufmann said that she would contact the workshop to advise what action should be taken on the following Monday. The applicant denied making any statements to Mrs Kaufmann about the adverse health consequences of radiation. He also denied discussing with her obtaining a new unit. The applicant gave evidence that when he inspected the unit he observed a small flaw in the glass. After he was testing it commenced to craze and after the unit was placed into the back of his van the whole of the glass door slowly shattered like a windscreen. Mrs Kaufmann's version of the incident is different. She said that the applicant had attended her home and after testing the oven advised her that it was leaking and the door was damaged. Further he advised her of the dangers of radiation and patted his stomach and said he could feel the rays coming out. He made reference to the door being damaged and the use of foil as a possible reason for damage. He further advised her that it would cost at least $100 to get a new door and that it was not worth repairing the unit. She should get a new one. He advised her not to go to Myer because they were "robbers". He further advised her that he knew of someone who had developed five cysts in the stomach as a result of exposure to radiation. Mrs Kaufmann gave evidence that she made an arrangement for the applicant to contact her on Sunday to discuss the future fate of the oven. The applicant failed to contact her on the Sunday. Mrs Kaufmann was concerned as to the information that had been conveyed to her by the applicant and she contacted the manufacturer, Sharp. Sharp technicians then contacted the respondent and Stewart then telephoned the applicant to find out what had occurred on the visit to Mrs Kaufmann. He asked the applicant whether he had made any reference towhether Mrs Kaufmann could get cancer. The applicant first said "yes" then "no" and then said he told her she could get some form of injury namely "burning inside the stomach". Stewart had advised the applicant that technicians are not in a position to give medical advice and the applicant said that was fair enough. He said that he would not do it again. Stewart was concerned as to what had happened because the respondent takes contact from the manufacturer such as Sharp very seriously. He brought the matter to the attention of Ryal. Subsequently Mrs Kaufmann's oven was tested at the workshop of the respondent. At the time the glass in the door was completely shattered but when tested the oven was found to be in proper working order. Stewart gave evidence that the applicant told him that the glass door had shattered in the car due to the heat. The applicant denied telling Stewart this. Stewart was unable to understand how the unit could have sustained the damage it did. The Respondent Interviews the Applicant When the two matters of the Morris and Kaufmann ovens were brought to the attention of Ryal he was concerned and formed the view that he should investigate the matter. Stewart provided him with a memorandum detailing his conversation with the applicant in relation to the Morris oven and Mr Ryal decided to arrange a meeting with the applicant to discuss the matters. The applicant on 24 and 25 January was absent due to illness but was contacted by Ryal by telephone and asked to attend on the next working day which was Friday 27 January. On that day the applicant brought the Morris oven into the workshop at Elsternwick. He was assisted in unloading the oven by Stewart. The applicant gave evidence that the oven still had a pungent odour about it as well as having the appearance of melted caramel. When the oven arrived at the workshop it was examined by Barratt and Ryal. Ryal gave evidence that the oven appeared in reasonable condition and was repairable. He said that the repair costs would be about $250 and given that it was a combined convection microwave-oven such costs would not be uneconomic. He denied any pungent odour or seeing any melted caramel like substance. All he observed was that oven was an unclean oven. No witness corroborated the applicant's evidence that the Morris oven had a pungent sewerage-like odour or that there was a melted caramel like substance on it. Ryal discussed the proposed interview with Barratt. Barratt gave evidence that he had the impression that Ryal was intending to terminate the applicant. Ryal's evidence was that he had not intended to terminate the applicant but that he had prepared a separation certificate in order to be fully prepared at the meeting. He was intending to question the applicant about the Morris and Kaufmann matters in order to ascertain the position for himself. He was concerned because on the account of the Morris incident the applicant appeared to be in breach of company guidelines in that he had failed to return the unit to the workshop given that the job was listed as having been completed. In relation to the Kaufmann matter, Ryal was concerned about the actions that had been taken by the applicant, which had caused extreme upset to the customer, and had the potential to damage the respondent's relationship with Sharp. The respondent's premises at Elsternwick are small in size and there is no private area within the office/workshop. The only place where any form of private conversation can occur is in the back car park area of the premises. After the applicant attended at the office and unloaded the Morris oven, he was asked to perform his pay-in and then to perform a stocktake on parts in his vehicle. Ryal then asked the applicant to have a discussion with him. Ryal asked Stewart and Barratt to be present for the purpose of witnessing the discussion. Ryal then asked the applicant what his actions were at the Morris home. The applicant then went through a lengthy discussion indicating that he tried to repair the oven. He had replaced the parts and had then decided that it was uneconomical. The applicant said that he had told Mrs Morris that it would cost over $300. He had then told her that she could purchase another unit for a lower price and his recommendation was that she did. He then said that he did not have time to take the parts out and asked her to be able remove the unit. Ryal had asked him why he had taken the oven home. The applicant said "so as to remove the parts". Ryal asked why he had not taken it to the workshop and the applicant said that he did not have to. Ryal had said that it was normal practice to do that but the applicant said that a number of other technicians did not do so. Ryal said that he was not aware of this and would be concerned if that were the position. Ryal then detailed to the applicant Stewart's account of what he had been told by the applicant as to why he had taken the Morris oven to his home, namely, to repair it for the customer. He asked the applicant to provide him with an understanding of the conflict between the applicant's version and Stewart's statement. At this point the applicant burst into an accusation that Stewart was a liar. He repeated this on a number of occasions. He approached Stewart and indicated to Stewart that Stewart should hit him. Stewart approached the applicant and pointed to the applicant and said "don't call me a liar". At this point Ryal intervened between the two of them and told Stewart to calm down. The atmosphere was heated. Ryal then said to the Applicant that given what he had just seen and given all the accounts to him he had no alternative but to summarily terminate his employment. He attempted to hand the applicant the separation certificate. Ryal said that he saw the applicant as the aggressor in the incident, the applicant was agitated and angry. It was "very ugly". Stewart made no threat of violence to the applicant. The applicant's version of this interview was that Ryal had terminated him after he had asked for the applicant's version of the Morris incident. After this termination the applicant claimed he had twice asked Ryal why and it was then that the Stewart statement was put to him. The applicant then said he called Stewart a liar and Stewart then moved forward and shaped up to punch him. The applicant said that he did say to Stewart to "take your best shot". The applicant gave evidence that he was extremely distressed at the time and that at this point Ryal jumped in and grabbed Stewart. The applicant claimed that after Ryal had separated the two Ryal then told the applicant that as he was no longer employed by the respondent he had to return the keys, the car, the mobile phone and other company property including a shirt and jumper that he was wearing. The applicant gave evidence that Ryal was out of control. He thought that he would tear the shirt off his back. He further gave evidence that he could not return the car because it had a special seat fitted in it. He advised Ryal that he would need half an hour to take the seat out. The applicant ran to the car and locked himself in it. Ryal then approached him and told him that if he drove the car it would be reported to the police as theft. The applicant then removed the parts from the back of vehicle and then drove it home. At that point he contacted the Victorian State Manager of the respondent, Mr McMillan and advised him of the situation. McMillan told him that provided he return the vehicle at 4.00pm that day everything would be in order. He subsequently did this. Ryal's version of events after the advice of termination differed. He told the applicant that because he was no longer employed he would have to return company property, but he did not require that the clothes be returned immediately. He advised the applicant that Barratt would accompany him home in the car. He did confirm that he had warned the applicant that he would report the car as stolen if the applicant drove the vehicle. Ryal's version of the final interview was corroborated in all significant respects by Stewart and Barratt. Credibility of Witnesses The applicant's credit was strongly challenged in cross examination. His evidence in relation to what happened at both the Morris house and the Kaufmann house differed remarkably from the evidence of those two customers. His evidence of the phone conversation with Stewart differed. His version of the final interview was contradicted by three credible witnesses. All matters of substance were put to the applicant in cross examination and he had the opportunity to comment on the evidence that was subsequently led. Stewart's evidence in relation to his recollection of the phone call as to the reason for the relocation of the Morris oven was the subject of a contemporaneous note produced in evidence. Mrs Kaufmann refreshed her memory of the visit to her house from some notes which she produced. I have had regard to the applicant's demeanour and to the sheer weight of the evidence of witnesses contradicting the applicant on a range of matters, large and small. On the basis of these considerations I find the applicant lacking in credibility and I am satisfied that on any matter in which there is a dispute on the evidence there is no alternative but to prefer the evidence of the respondent rather than that of the applicant. Findings on the Evidence In relation to the Morris incident a crucial finding which must be made is related to the reason why the applicant took the oven from the premises. I find that the applicant attended at the premises and tested the unit. He ascertained that repairs would cost around $280 and then advised Mrs Morris that those repairs would be uneconomic given the cost of replacement units which were available. In response to this information Mrs Morris made a decision to accept the applicant's recommendation that the unit be replaced. She then asked him whether he would be prepared to dispose of the old unit. I find that the applicant did not install any parts in the Morris unit which necessitated him taking the unit away in order to retrieve those parts. I further find that the applicant's advice to Mrs Morris that the unit was uneconomic to be repaired was inappropriate given that it failed to convey sufficient information to the customer in relation to the repair of the whole unit to allow her to make an informed choice. It follows from these findings that the applicant did falsely tell Stewart in the phone conversation that he had removed the unit in order to repair it for the customer. I find that this explanation was given in order to provide an excuse for the failure to return the unit to the respondent's premises given that the applicant had notified the respondent after attending at the Morris house that the job had been completed. I therefore reject as false the explanation given by the applicant at the interview of 27 January that he had to remove the unit in order to retrieve his parts. I find the similar explanation given in these proceedings also to be false. I find that it was the respondent's policy that any units removed from customers houses were to be returned to the workshop for assessment and were not to be disposed of by the technician. The applicant knew this and has failed to bring forward any evidence that other technicians support his version of the policy. The only conclusion which can be drawn is that the various accounts were designed to explain an action in clear breach of company policy. They were to explain his possession of an oven which, had it not been for the query by Sharp, would have wrongly remained in his possession. In relation to Mrs Kaufmann I find that the applicant did make comments to her of the health effects of radiation in such a manner as to cause her distress. I further find that he did discuss with her the option of purchasing a new oven and did make a disparaging comment about Myer. I accept Stewart's version of the subsequent phone conversation in which Stewart was advised by the applicant that he had given advice to Mrs. Kaufmann about the health effects of radiation. I reject his evidence in these proceedings that he denied this in the conversation with Stewart. I find that the two incidents involving the applicant were sufficient to cause considerable concern to Ryal due to the implications on the respondent's reputation as a service provider to its customers and also its relationship with a major manufacturer, Sharp. I find that Ryal did discuss the possible termination of the applicant's employment with Barratt prior to the meeting of 27 January. I find however that Ryal had not decided to terminate the applicant's employment prior to that meeting. In relation to the version of the meeting I accept without hesitation Ryal's version of events. I find that the applicant had no justification for accusing Stewart of being a liar in relation to his phone conversation with the applicant regarding the Morris oven. I find in relation to what occurred that the applicant was the aggressor and that Stewart's and Ryal's actions were not unreasonable responses in the circumstances. I accept the respondent's version that the applicant was offered the opportunity to be accompanied home and that Ryal made no requirement of him that he immediately remove the respondent's clothes which he was wearing. I find that Ryal only terminated the applicant's employment after the applicant's outburst when Ryal had put to him Stewart's account of the phone conversation which contradicted the version which the applicant had just given to Ryal at that meeting. I find that in deciding to terminate the applicant Ryal took into account both his response to the questions in relation to the Morris matter and the applicant's aggressive response to being asked to explain the conflict between what Stewart had said he said and what he had just told Ryal. Was there a breach of s170 DC of the Act? Counsel for the applicant argued that the circumstances of this termination were such that the requirements that the applicant be given an opportunity to respond to the allegations pursuant to s170 DC of the Act were not met. The respondent, on the other hand, argued that the applicant's own actions prevented the applicant responding and thus the respondent came within the terms of s170 DC(b). Ryal's evidence was that, at the time that he advised the applicant that his employment was terminated, he had not raised the question of what had happened at Mrs Kaufmann's house. His decision to terminate was, as I have found, based on the conflict between the reason which the applicant gave him in relation to the Morris oven and the version which the applicant had earlier given to Stewart on the telephone. Ryal also relied on the applicant's response when asked to explain the conflict. It is clear from the circumstances of the final interview that the applicant's aggressive response when Ryal raised the conflict between the two versions prevented that meeting proceeding any further. Counsel for the applicant was critical of the location of the meeting in that it was held, with all parties standing, in the car park of the respondent's premises at Elsternwick. While in retrospect it may have been appropriate for Ryal to have selected some more neutral location for the interview with the applicant, the requirements of s170 DC must be applied in a commercial and industrial environment and to actual work places. In these circumstances, the decision of Ryal to conduct the interview in the car park was not inappropriate. Further, it was the applicant's actions which prevented the matter proceeding and, in those circumstances, I am satisfied that there has been no denial of the applicant's rights under s170 DC of the Act. Has there been a Breach of s170 DB of the Act? The applicant was summarily terminated and not given any notice or payment in lieu thereof. Section 170 DB(1) of the Act requires that an employee be given notice unless the employee is guilty of serious misconduct, "that is, misconduct of a kind such that it would be unreasonable for the employer to continue the employment during the notice period"(s170 DB(1)(b)). Whether the applicant was required to have his employment terminated on notice thus depends upon whether or not the basis on which the respondent terminated the employment can be characterised as serious misconduct. Counsel for the respondent argued that the applicant's aggressive response to Ryal's questions was such as to constitute serious misconduct justifying Ryal terminating him there and then. Counsel for the applicant, on the other hand, maintained that the applicant's actions could not be construed, according to authorities, as serious misconduct. It was suggested the conduct was not of such gravity or importance as to indicate a rejection or repudiation of the contract such as is required in authorities such as North v Television Corporation Ltd (1978) 11 ALR 599. Whether the conduct is to be construed as serious misconduct is a matter which must be determined objectively. Here, Stewart was the superior of the applicant and held a senior position within the respondent company. I have found that the applicant did advise Stewart that the reason he had the Morris oven at his home was to repair it for the customer. Stewart recorded that in a contemporaneous memorandum and conveyed it to Ryal. The applicant gave a different version to Ryal on 27 January. The applicant then, having been confronted with his earlier inconsistent version to Stewart, immediately accused Stewart of being a liar. He then approached Stewart in an aggressive fashion and invited Stewart to hit him. At that point Stewart had not done anything aggressive towards the applicant, and Stewart's only response, on the evidence, was to step one pace towards the applicant and point his finger at him and say, "don't call me a liar." The applicant was at that stage being invited by Ryal to explain a serious breach of the respondent's policy on customer goods and to also explain a serious inconsistency between what he had told Stewart and what he had just told Ryal. The applicant's actions were, in the Court's view, a clear diversion to avoid the necessity for him to give a satisfactory account of his position. When his actions are put in this context, I am satisfied that they do constitute serious misconduct. Here, the applicant, having given a false account to Stewart and then given another false account to Ryal, was in clear breach of his duty of fidelity to his employer. He has failed in his duty to truthfully answer his employers questions and to co-operate in Ryal's investigation into the customer queries. When these matters were raised in a formal way, he then acted in a way designed to provoke an aggressive response from Stewart and made a serious defamatory accusation against a superior. He deliberately disrupted an investigation into the two matters being conducted by Ryal. I am satisfied that these actions were open to be characterised as serious misconduct by Ryal and to justify the summary termination of the applicant. On this basis, I am satisfied that the respondent was not required to give the applicant payment in lieu of notice under s170 DB of the Act. In coming to this conclusion I note the similarities between this case and two other cases decided by this Court which have concluded that there was serious misconduct: Allan v Glasemar Pty Ltd (Industrial Relations Court of Australia, Ryan JR, 28 October 1994), A.L.H.M.W.U. Liquor & Hospitality Division v Carlton and United Breweries Ltd (Industrial Relations Court of Australia, Murphy JR, 2 March 1995). Did the Respondent have a Valid Reason to Terminate the Applicant's Employment under s170 DE? Having regard to my characterising the actions of the applicant as serious misconduct, I am satisfied that the respondent has discharged its onus of proof pursuant to s170 EDA of the Act that, pursuant to s.170 DE of the Act, it had a valid reason to terminate the applicant's employment. Was the Termination in Breach of s170 DE(2) of the Act? The applicant had been employed by the respondent for sixteen years. He had a good record. As recently as December 1994, he had been the subject of a positive reinforcement counselling session with his superiors. He had not been the subject of any official warning though there was evidence of a warning given in July 1994 which was subsequently withdrawn. There is uncontested evidence that he had been one of the most successful service technicians for the respondent and had been awarded various awards and prizes. His good record could suggest that Ryal failed to canvass alternatives to termination. There is some authority for the proposition that alternatives should be canvassed in Gregory v Philip Morris (1988) 80 ALR 455. In that case however the individual involved was placed in a position where he could not work as a result of reasons which did not go to his performance. In those circumstances it was clearly reasonable for the employer to consider an alternative position for him.