Phillips v Foxall

THE EVIDENCE AND CREDIBILITY OF THE APPLICANT The applicant impressed me as intelligent, articulate, perceptive and capable of quick and accurate analysis. There is uncontested evidence that he often worked long hours and that he processed a large number of financial and insurance contracts on behalf of his employer and his employer's clients and that he had a background in banking, commercial and consumer credit and in finance and insurance in the motor industry. Having said that I also must say that in addition to, and apart from concessions made directly by the applicant, or on his behalf by counsel, there are a number of inconsistencies and contradictions and changes in his evidence and they reflect on his credibility. They include but are not confined to the following: 1. claims that he was only two to five minutes late when arriving late at work amended to perhaps forty-five minutes late on one occasion and maybe thirty minutes late on another occasion 2. variations from denial of appearing at work with blood shot eyes and smelling of alcohol to concessions that this occurred on occasions 3. denial of any warnings ever being given to him amended to a concession that a number of oral exhortations were given which the applicant refused to accept as constituting anything resembling a formal warning on performance or conduct 4. variations from never being affected by alcohol to admissions of binge drinking 5. changing the description of the proposed Warburton Health Farm Course from a "Stress and Alcohol Management Course" to an "Executive Stress Course" with a potential of a link to some study of alcohol management 6. initial denial that George Kotses, Personal Assistant to the Managing Director, ever remarked on the applicant's excessive drinking and appearance changed to a concession that such remarks were made but in an off-handed and informal manner 7. initial denial that Kotses ever told him to examine his appearance in a mirror varied to a lack of recall of such requests and a concession that such requests might have occurred 8. initial denial of any overuse of alcohol later altered to an admission in cross-examination that the applicant had told Kotses that the relationship with a Nissan finance employee, Angela, and the breakdown of that relationship contributed to overuse of alcohol 9. a minor but not insignificant shift in position in respect of mouthwash with the applicant indicating that he did not recall keeping mouthwash in his filing cabinet at work which evidence was almost immediately amended to the possibility, even the likelihood, that he might have kept mouthwash briefly at work until he could take it home - a shift in position apparently predicated on the concession that he, the applicant, would "often go to the chemist" 10. variation in position from rare visits to the canteen on arrival at work to attending what he described as the Wood Duck Inn after arrival at work for five or ten minutes and on other occasions up to fifteen minutes when the applicant stated he would request "vegemite toast or raisin toast" but that his visits to the canteen were "never at the expense of my performance in my job". At another stage, the applicant said "whether it is four times a week in the morning when I am there for five minutes or ten minutes ordering toast, whether I am there for twenty-five minutes, I made sure my work didn't suffer" 11. variations in evidence as to availability for pick-up on time when being driven to work, such variations including a claim that he, the applicant, was instantly ready on the majority of occasions that he could recall - followed by concessions he often kept the driver waiting for a very short time arriving at work up to forty-five minutes late "maybe on one occasion" and thirty minutes late "maybe on one occasion" 12. one statement that the relationship with the Nissan employee, Angela, was never raised in the termination meeting varied to a position where the applicant was conceding the relationship might have been mentioned but only in a general and non-specific way 13. initial denial of the presence of Jane at any meeting between the applicant and Kotses in which concern was expressed about the effect of the "Angela at Nissan Finance" relationship and the effect of that deteriorating relationship on the applicant's behaviour, performance and alcohol intake varied to a vague recollection that Jane joined in with what the applicant described as "unwanted opinion" and "feigned concern". Other evidence of the applicant which reflected adversely on his credibility but which could not be described as a variation or inconsistency or contradiction included: 1. a claim that he never consumed alcohol on the premises with the exception of the Christmas lunch, a couple of glasses of wine and a couple of cans after work hours had finished but never during working hours 2. the applicant's evasive evidence and lack of recollection of detail about spotter's fees recommended by him in agreements for sale of motor cars (Exhibits R3, R4, R5 and R8). Again, it is difficult to accept, and the Court does not accept, that the applicant had such a hazy recollection of these quite specific contracts of sale in which he was indisputably and substantially involved. The Court has concluded that the applicant recalls the transactions quite well but was not prepared to admit this and was not prepared to give direct and believable evidence on his role in the recommendation of the spotter's fees. 3. the regular driving of motor vehicles, the property of the respondent, during a period in which the applicant was serving a lengthy licence suspension and an admission of this serious and irresponsible conduct only after it was brought to the attention of the respondent's managers 4. the applicant's participation, conceded in the hearing, in the deception of a young woman who was driving a car in the Peel Street, Royal Parade, Elizabeth Street roundabout. Her car collided with a vehicle in the possession of the respondent and driven by the applicant while unlicensed. The applicant and his pasenger, Nicholas Eriksen, participated in deliberate and false representation that the latter was driving.

RESPONDENT'S EVIDENCE George Kotses George Kotses was a difficult witness. He was discursive. He was difficult to contain within the bounds of relevant evidence. My conclusions are that he is very loyal to the respondent and sees himself as an instrument of the Managing Director. He operates, as did the applicant and most of the respondent's witnesses in a high pressure sales area of a very large retailer of motor vehicles. There are not likely to be many industries which replicate the somewhat frenetic atmosphere commonly associated with closing deals in the motor car sale industry. I do not find it surprising in such a climate that the numerous and somewhat informal meetings between Mr Kotses and the applicant and between the applicant and Mr Jerry Triantos, the respondent's Floor Sales Manager, were informal, sometimes volatile and probably never reported or recorded in writing. I have no doubt that Mr Kotses is prone to some exaggeration and that his judgment is much influenced by his commitment to what he perceives to be the interests of the respondent and particularly the Managing Director, Mr Jane. Having said that, I have no reason to find him other than a genuine witness who has an accurate recall of specific meetings with the applicant on certain occasions. Furthermore, I accept his evidence that on many other occasions, dates and times unknown, he, in his own inimitable way, counselled the applicant and exhorted him to comply with Southern Motors requirements and expectations. Formal words like "counselling" and "exhortation" are not terms that spring readily to mind when observing Mr Kotses in the witness box but that does not mean that in his own way and in the terms of a volatile marketplace he did not counsel and exhort and indeed warn the applicant. I find that he did and what is more I find that he did it for and in effect on behalf of the Managing Director and as Personal Assistant to the Managing Director and as defacto General Manager, whatever his title. Jerry Triantos I find that Jerry Triantos had a lesser but not insignificant role in exhorting the applicant to be more punctual, to leave the canteen and return to his work place, to modify his approach at times with customers, and in the later part of the applicant's employment, to improve his appearance. I also accept that Triantos commented on occasions about the smell of alcohol and that he and the applicant discussed the applicant's personal problems. However, I stop short of finding that Triantos counselled him in respect of the relationship problems or that it would have been relevant if he had. Christopher Neal I find that Christopher Neal, Finance Manager, was a somewhat permissive and perhaps weak supervisor who, to use his own words "adopted a nice guy type of approach". Having said that, I accept that in a somewhat timid fashion he remonstrated with the applicant and that he did warn him and no doubt in the colloquial terms he used in evidence. In other words, I accept that he did indeed use the term "don't shit in your own nest" and what is more that in the context of their discussions as finance officers and in terms of the applicant's conduct and behaviour that the applicant would have known that Neal was asking the applicant to change that conduct and behaviour. Furthermore, I accept that he did indeed use Triantos to get the applicant out of the canteen and that he instigated a meeting between the applicant, himself and Kotses to warn the applicant about lack of punctuality and that at that meeting Kotses criticised Neal for his lack of supervision of the applicant while also reprimanding the applicant. While Neal was often a passive spectator, the Court also found value in him as a witness through his corroboration of some of the Kotses warnings especially those given to the applicant at the motivational sales meetings. Nicholas Eriksen I have placed no weight on the evidence of Nicholas Eriksen because I believe it would be unwise to do so. I am not, for one moment, suggesting that he was not a witness of truth but given his admitted close friendship at one stage with the applicant and his open admission, indeed allegation, that "due to my association with Glen Campbell I went off the rails in a big way" I have decided that his evidence should be disregarded. William Jane The Court agrees with Counsel for the applicant who commenced his final address by pointing out that it was Mr Jane who decided to dismiss the applicant. It was Mr Jane as Managing Director who stated that he based that decision on the culmination of a variety of things. He gave specific evidence that he took account of: 1. the fact that the applicant concealed his loss of a licence to drive a motor car and at least by implication lied to the respondent about the status of his licence and misled the respondent when driving respondent vehicles without a licence 2. the untruths which Mr Jane believes the applicant told to him in relation to the payment of commissions, i.e. the spotters fees to an Acceptance Officer of Nissan Finance 3. the Court notes before listing the next ground for termination that no satisfactory evidence was tendered which would allow the Court to reach a finding of fact in relation to it but it is noted as one of the grounds on which Mr Jane said he relied. He described it as follows: "the evidence given earlier of drug taking and the drug sales and all those things" This is described more precisely in paragraph 13.12 of Mr Jane's affidavit 4. the applicant's admissions of heavy drinking and what Mr Jane described as "alcoholism" 5. the failure to follow policy "as far as notifying on work". This is clearly a reference to the applicant's failure to attend work on Saturday, 11 June 1994 and to phone in until 9:30 am. Details were given in general evidence and in paragraph 13.13 of Mr Jane's affidavit. This absence from work seems to have been generally regarded by all respondent witnesses as the last straw that broke the camel's back 6. the relationship with "the woman from Nissan". Again, that was covered in general evidence and in paragraph 13.11 of Mr Jane's affidavit 7. the lack of punctuality which issue was covered in detail, probably excessive detail in the trial. The kernel of Mr Kenyon's attack as Counsel for the applicant on these grounds of dismissal is that many of these matters (perhaps all but the final absence on Saturday, 11 June) were condoned by the respondent and cannot be relied on as grounds for a valid termination. I disagree with that proposition. When judgment was delivered the Court stated that the fact that summary dismissal did not follow certain incidents which might have justified summary dismissal does not mean that such misconduct was condoned or that such previous misconduct cannot be taken into account in respect of a termination at a later stage. CONDONATION Counsel for the applicant alleged ex post facto rationalisation and rather colourfully categorised the respondent's justification for termination as: "Every peccadillo, every aspect of the applicant's employment, which may have been the basis of a warning at some stage, was dragged up in the forlorn attempt that if you throw enough mud it will stick." He relied on the principle in Phillips v Foxall [1872] 7 LRQB 666 at 680: "Now the law gives the master the right to terminate the employment of a servant on his discovering that the servant is guilty of fraud. He is not bound to dismiss him and if he elects after knowledge of the fraud to continue him in his service he cannot at any subsequent time dismiss him on account of that which he has waived or condoned." This is an old authority. Mr Kenyon cited it as it appears in McCasker v Darling Downs Co-op Bacon Association Ltd [1988] 25 IR 107 at 114. In McCasker Ryan J doubted whether the respondent by a particular act waived or condoned certain activity. So too here I doubt very much that the respondent waived and condoned the various designated acts of misbehaviour and conduct. However, if I am wrong, these earlier acts taken with the final straw, the failure to attend work at all on Saturday 11 June constitute grounds for summary dismissal. This was the finding in McCasker and it is a finding I make in this case also. As in McCasker 1 too adopt the reasoning of Sheppard J in John Lysaght (Australia) Ltd v Federated Iron Workers' Association; Re York [1972] AILR 517: "It is no doubt possible for the company to waive particular acts of misconduct that would otherwise have justified dismissal without notice. These particular acts could not subsequently be used for this purpose once the decision was made not to rely on them. The act of misconduct however does not then disappear and become irrelevant when further misconduct occurs. It remains and makes up the continuing history and record of a man's service. That record may always be referred to for the purpose for which the company now points to it and the presence of incidents such as I have described will always be a relevant factor to be weighed in the balance by an employer when he comes to consider whether or not a further breach or other act of misconduct should not bring about a dismissal." Macken J in Australasian Transport Officers' Association v Department of Motor Transport [1988] 25 IR 235 at 244 was also cited but that does not take matters any further. The previous conduct there alleged was "abrasive" treatment of employees by the plaintiff employee, a man with 31 years service with the employer respondent. The allegation was many years old and in any event the material was irrelevant to the alleged misconduct. Here, the various acts of misconduct are all within a span of 12 months and all are relevant to the conduct and performance of the applicant as a finance and insurance executive with a responsible position in the respondent company.

OPPORTUNITY TO RESPOND Furthermore, the Court did not accept that the applicant was not given an opportunity to defend himself in accordance with Section 170DC(a). Counsel for the applicant referred to Nicholson v Heaven and Earth Galleries Pty Ltd [1995] 126 ALR 233 at 243 and to the Chief Justice's comment that while no particular formality is required in terms of warnings, mere exhortation to improve is not enough. It is my view that the general comments at motivational meetings, even direct comments targeted specifically at the applicant, are unlikely to constitute adequate warning so as to put the applicant in a position in which he can be said to have had an adequate opportunity to defend himself. However, such a pattern of exhortation is not on that account wholly irrelevant. As far as I am concerned a regular pattern of such exhortations coupled with much more specific warnings from Mr Jane in respect of spotters fees and appearance, attitude and demeanour and Messrs Kotses, Triantos and Neal as outlined earlier, such a pattern can and I find did constitute adequate warning. Southern Motors is a busy dealership. While more formality than of yore is devoutly to be wished in the future interests of employers and employees subject to the specific unlawful termination provisions of Division 3 Part VIA of the Industrial Relations Act 1988, the realities of the marketplace are likely to lead, as they did here, to a series of less formal exhortations. I am satisfied that while all of these exhortations were oral and none were in writing and probably none couched in formal terms, many were adequate and no doubt pithy and direct. It is doubtful that Neal was direct enough. The Chief Justice said in Nicolson at 243 that these things should be put directly: "For s170DC(a) to be satisfied, it would have been necessary for the respondent to determine what aspects of Mr Nicolson's conduct or performance were such as to justify possible dismissal and put those matters squarely to him, under circumstances where he had a fair opportunity to defend himself."

I find that Kotses and Triantos put these things directly to the applicant and that Jane was quite direct in setting out company requirements in the meeting on the first of the spotters fees and indeed in his counselling on demeanour and attitude.

AFTER ACQUIRED INFORMATION Linked to the alleged condonation (which I have rejected) was a claim by Mr Kenyon for the applicant that the respondent relied on after acquired information. Mr Kenyon cited Wheeler v Phillip Morris Ltd [1990] 97 ALR 282 at 308 where Gray J stated: "Under the earlier law relating to wrongful dismissal, it was open to an employer to justify a dismissal retrospectively, by reference to facts now known to the employer at the time of the dismissal, but discovered subsequently, or by reference to a correct analysis of facts which were known, but which were analysed incorrectly at the time of the dismissal. It is clear from the judgments in Gregory v Philip Morris Ltd [1988] 80 ALR 455 that cl 6(d)(vi) of the award does not permit that sort of approach. It is necessary to look at the circumstances known to the employer, and to ask whether the employer acted reasonably in the light of them, and particularly whether the employer discharged adequately the obligation to investigate the facts." Mr Kenyon, while conceding the divergence of opinion between Gray J in Wheeler and Gregory above and Van Doussa J in Lane v Arrowcrest Group Pty Ltd [1990] 99 ALR 45, submits that this termination was retrospectively justified on the basis of after acquired information and was accordingly unfair and unjust. Firstly, the termination was not in my view justified on or based on any after acquired information. All the information was in the possession of the respondent prior to the termination including information on the second, third and fourth spotter's fees (Exhibits R3, R5 and R8). Secondly I believe the respondent conducted adequate investigations and that the applicant had adequate opportunity to respond to all matters except the second, third and fourth spotter's fees which as far as I can see were not put to the applicant at the final meeting on the day of termination although it is possible that some general reference to spotter's fees was put at that final meeting. With all other matters I have found that the applicant had adequate opportunity at meetings with Messrs Jane, Kotses, Triantos and Neal and that at the meeting with Jane in about May on the first spotter's fee the applicnt gave Jane the impression there were no other fees of that nature paid at his recommendation. Thirdly, while the respondent in this case did not rely on after acquired information as any form of significant justification for termination, I simply note that the second, third and fourth spotters fees, discovered just prior to termination, came perilously close to Van Doussa J's example of fraud. THE TERMINATION MEETING It could be argued that as the applicant was confronted at the termination meeting by a determined Kotses with orders from Mr Jane to terminate the applicant's employment that at that meeting the applicant had no last final chance to defend himself. Firstly, I find that despite Mr Jane's undoubted directions that termination was to be effected, the applicant did have an opportunity in that forty minute meeting to defend himself. His defence was to throw himself on the mercy of Mr Kotses, to ask for another chance, to promise once again to comply with the respondent's requirements and expectations and to draw attention to his "figures", i.e. the volume of work performed by him. Secondly, if I am wrong about that last final chance, I have found that he had ample earlier opportunities to defend himself. The best defence would have been to mend his ways. He never did and I say that is something of a tragedy taking account of his very obvious ability and potential. ORDER I have found valid grounds for the termination and that the termination was in no way harsh or unjust or unreasonable. Indeed, within an industry not noted (I would have thought) for leniency, much was extended to Glen Andrew Campbell. The application under Section 170EA of the Industrial Relations Act 1988 is dismissed. I certify that this and the preceding pages are a true copy of the Reasons for Judgment of Judicial Registrar Ryan. Associate : Date : 22 February 1995 Appearances: Counsel for the Applicant : N.J. Kenyon Solicitor for the Applicant : Slater & Gordon Counsel for the Respondent: : Graham Robertson Solicitor for the Respondent: : Edward R Oates Dates of Hearing : 24 and 25 November 1994 20 and 21 December 1994 31 January and 1 February 1995 Judgment : 17 February 1995