Q. --to your affidavit and the description you have given it in your affidavit?
A. Yes.
15 There can be no doubt that the evidence of Mr Georges corresponds with that of the applicant. That is, that there was agreement reached between him, on behalf of the respondent, and the applicant to the effect that she would be paid a commission of 5% of the annual turnover of new business gained by her. I do not accept that the applicant ever agreed to payment of 1% commission, nor that any contract signed by her contained the words "This is to be reviewed after 3 months."
16 I am concerned that the solicitors for the respondent, Baker and Mackenzie, sought to persuade Mr Georges that the document which was annexed to his affidavit was in fact the letter of appointment signed by the applicant in circumstances where Mr Georges was quite clear in his mind that the letter of appointment signed by her contained a reference to 5% commission.
17 That this was the evidence of Mr Georges was made clear to Baker and Mackenzie, because in April 2002, some eight months before those solicitors had assisted Mr Georges in preparing his affidavit, Mr Georges had sworn an affidavit that was filed in the proceedings on behalf of the applicant and that had been prepared for him by the applicant's solicitor. That affidavit recounted conversations between Mr Georges and the applicant leading up to the signing of the letter of appointment. That affidavit recounted in particular that an original letter of appointment containing a reference to 1% commission had been rejected by the applicant and she had refused to sign it. That affidavit said that Mr Georges had attended on Mr Napper who had changed the commission rate from 1% to 5% in handwriting and that it had then been signed by the applicant. Mr Napper stated that "the commission was calculated each 13 weeks starting from the commencement of her employment." In these circumstances, it was inappropriate for the respondent's solicitors to have persuaded Mr Georges to swear an affidavit on the basis that a particular document represented the applicant's contract of employment without asking him to explain his earlier inconsistent sworn evidence.
18 Evidence about the letter of appointment was also given by Susan Howse who was, for a period, employed as a Human Resources Manager for the respondent. She first had direct contact with the applicant in about May 1999 and participated in a number of discussions when differences arose with respect to the payment of the applicant's commission. I shall refer to that aspect of the evidence of Ms Howse later.
19 Ms Howse prepared a file note of material that she had extracted from the applicant's personnel file. There is a note dated 12 September 1996 that the applicant was employed on a salary of $65,000 which includes "1% commission on annual turnover of new business." There is a further note dated 22 December 1998 to the effect "letter issued to Suearne re her commission scale, 1 at 1% and 1 at 5%. Neither letter was signed." Ms Howse said that when she prepared the file note, the last date on which was 21 May 1999, there were two letters in the applicant's personnel file, one containing reference to 5% and the other 1%. She said that she did not remove the 5% letter from the file nor did she destroy it. As I understand the evidence of Ms Howse, it may be that she was asked in December 1998 to prepare two letters, and that this reference dated 22 December 1998 may not have been a reference to the original letter dated 12 September 1996 to which I have earlier referred.
20 Mr Napper, in his affidavit evidence, annexed what he said was a copy of a letter of employment dated 12 September 1996, which he had prepared, and which he had addressed to the applicant and was signed on the final page. That document referred to commission of 1% and contained the words "This is to be reviewed after three months." In cross-examination, Mr Napper said that he had been given that document by the solicitor from Baker and Mackenzie who was assisting him in preparing his affidavit. As the document that Mr Napper had been given contained at the end a separate page signed by the applicant purporting to accept her employment "upon the terms and conditions outlined above", Mr Napper assumed that it was the contract of employment that the applicant had entered into with the respondent. Mr Napper conceded in cross-examination that he did not see the applicant sign the document nor did he recollect having any conversation with Mr Georges in which a change was to be made to the percentage of commission payable from 1% to 5%. He said that he did not believe that he had any such conversation but if he did he had no recollection of that conversation.
21 In any event, it is clear from the evidence of the applicant and Mr Georges that there was in existence at some stage a letter of appointment dated 12 September 1996 that referred to 5% commission payable to the applicant. The only copy of that letter was held by the respondent because the applicant no longer has the copy that was given to her at the time. In circumstances that have not been explained, that letter has been removed from the applicant's personnel file retained by the respondent some time after 21 May 1999.
22 The applicant asserts that there was no other discussion between herself and Mr Georges about any detail concerning the circumstances in which, and the basis upon which, the commission would be paid. Mr Georges said in his affidavit prepared by the respondent's solicitors that in the course of negotiating the applicant's engagement as an employee, he explained to her in general terms the way in which the respondent's commission structure operated. He said that he told the applicant that there were two types of sales positions, territory sales executives and corporate account executives. Relevantly, he said he told the applicant that a corporate account executive would normally earn a base package of about $65,000 to $75,000 inclusive of car allowance and superannuation. They would earn commission of 1% on all new accounts gained provided that the new account continued to trade for 13 weeks and "they are making budget. And the budget is usually a little higher. Although the commission is lower, it is calculated on all new business gained, and it's paid for the first 12 months of trading on new accounts, but not after that. So there is much greater potential to maximise the commission you can earn. If you are making budget, you would be able to earn a fair amount." Mr Georges said that he also explained to the applicant that the budget was a "rolling budget" so that it increased by the same amount each week to take into account income earned from accounts previously gained. He said he told the applicant that, for the first quarter, her total budget was $45,500 and after that "it goes up to $84,500 per quarter. That's to give you a bit of lead in time to pick up your sales performance."
23 Mr Georges said that he had conveyed this information to the applicant during the course of an initial interview. The applicant's second interview was conducted by the general manager. Apart from introducing the applicant Mr Georges did not participate in the second interview.
24 The applicant denied that Mr Georges had ever discussed with her the fact that there would be a budget assigned to her, the nature of the budget nor that her ability to earn commission would be dependent on her achieving it.
25 In his evidence, Mr Georges said that account executives such as the applicant were required to submit documents to their sales managers on a weekly basis and they would be given, on a weekly basis, a performance summary which indicated their sales performance against their accumulated budget. However, the applicant said that these documents only commenced to be used by the respondent after she had been employed there for about 6 months.
26 A number of specific factual matters have been established by the evidence. It was the evidence of Michelle McDowell, the managing director of the respondent, that her perusal of the respondent's records revealed that the applicant had never achieved what she understood to have been the budget established for the applicant, namely $500 per week on a rolling basis, calculated over a 13 week period. Despite this, it has also been established on the evidence that the respondent paid the applicant, from time to time, commission on sales calculated at 5%. That this was so was established by the evidence of Steve McGuirk, a former State sales manager of the respondent who held that position for a substantial period during which the applicant was employed by the respondent. That this was so is also established by documentation kept by the respondent that clearly showed commission paid to the applicant being calculated on the basis of 5% of sales generated.
27 Furthermore, Mr McGuirk deposed to the fact that he had had a conversation with Mr Georges towards the end of 1998 in which he reported that the applicant was being paid a 5% commission despite the fact that she did not appear to have achieved targets set for her. Mr Georges confirmed in a conversation with Mr McGuirk that the applicant had been engaged on the basis that she would be entitled to 5% commission of turnover in addition to her salary package.
28 The respondent maintained for the purpose of the proceedings that the applicant's contract of employment with it did not provide for a 5% commission but only for 1%. In the face of the evidence constituted by that of Mssrs Georges and McGuirk and the documentation to which I have referred, I cannot comprehend how and on what basis the respondent could make such an assertion through its counsel, Mr Newell and, presumably, also through its solicitors, Mssrs Baker and Mackenzie. Nevertheless, the litigation proceeded on that basis.
29 I can only conclude on the basis of the evidence to which I have referred, and there was none in opposition, that the applicant's contract of employment provided for commission of 5% on sales based on annual turnover without any reference to any budget hurdle.
30 The applicant went on annual leave for 3 weeks at the end of December 1997 and then went directly on to maternity leave, not returning to work until 9 February 1998. When she did so, she worked part-time for 20 - 25 hours a week. She returned to full-time employment on about 20 March 1998.
31 Some insight as to what ultimately created the breakdown in relationship between the applicant and the respondent may be gained by the evidence of Mr McGuirk.
32 In a conversation with Mr Georges in late 1998, Mr McGuirk said that he wanted to change the commission structure that applied to the applicant. He acknowledged in his evidence that, at all relevant times, he was aware that the applicant was entitled to receive 5% commission on annual turnover of new business brought in by her. Indeed, Mr McGuirk authorised the payment of commission on this basis even though she had not made the budget assigned to her. For example, on 13 January 1999, Mr McGuirk signed a document authorising the payment of commission of $1,135.61 to the applicant at a rate of 5% of sales for accounts in the name of "Courier NSW" and "Skytrax" for the period 16 October 1998 to 11 December 1998. That payment had been authorised by another person within the respondent's organisation who had initialled it. The evidence in the proceedings was not clear as to whose initials they were. Although the name "Michelle McDowell" appears on the relevant document, her evidence was that they were not her initials.
33 Following his conversation with Mr Georges, Mr McGuirk said that he met with the applicant and explained to her that he wanted to change her commission structure. This would involve the application of a budget hurdle and a reduction in the amount of the commission to 1%. The applicant resisted any such change. Mr McGuirk advised the applicant that in his opinion her commission entitlement was bound, in any event, by the imposition of a budget hurdle. The applicant disagreed.
34 There was a further discussion in December 1998. On 22 December 1998, Mr McGuirk wrote to the applicant asserting that it was a condition of her employment that she was required to achieve a set accumulative budget of $500 per week and that she had failed to do so during the last three quarters. The letter stated that her results would be measured "monthly from January 1999."
35 After receiving that letter, the applicant and Mr McGuirk had a conversation in which the applicant said that she firstly was not required to meet any budget but that, in any event, she had easily met her budget because of certain accounts she had brought in including AMP. The applicant alleges that Mr McGuirk conceded that the applicant should have been credited for sales from the AMP account but had not been so credited because there was not "enough fat in it". Mr McGuirk denied that conversation. Whilst I accept that Mr McGuirk's evidence was given by him as truthfully as he could recollect it, he conceded that in effect he had very little recollection of his conversations with the applicant and what had occurred. In general terms, I accept the contents of Mr McGuirk's affidavit sworn in March 2002 but I prefer not to rely on his oral evidence given during the course of the proceedings as to what he may have recollected of his specific conversations with the applicant where inconsistent with her evidence because of his frank concession that he now has very little recollection independent of anything that had previously been committed to writing.
36 A second letter dated 22 December 1998 was given to the applicant. It was signed by Ms Howse and, as I understand it, purported to change the commission structure payable to the applicant. The letter stated that to be eligible for commission payments, which would be based on 1% of turnover gained by the applicant during a particular period, it would be necessary for her to have achieved an accumulated budget of $500 per week measured every 13 weeks. Mr McGuirk said that he had seen two versions of the letter. One contained a reference to 5% of turnover and the other to 1% of turnover. The applicant's evidence was to the same effect.
37 Consistent with other evidence in the proceedings, it would seem that all documentation referrable to any payment of 5% commission to the applicant has been removed from her personnel file kept by the respondent. No explanation for that removal has been proffered.
38 Thereafter, there continued to be communication including meetings between the applicant and, principally, Mssrs Georges and McGuirk, assisted by Ms Howse. The respondent's representatives continued to complain that the applicant was not meeting budget. She continued to complain that her budget was not being met because the respondent was not crediting her with new business that she was obtaining. The applicant continued to claim commission at the rate of 5% calculated on the basis that no budget hurdle applied.
39 Towards the end of these meetings, it seems that a degree of frustration caused the respondent's representatives to speak to the applicant in a manner that was not appreciated by her. This led to a series of correspondence and other documentation that I shall summarise briefly. I refer to it particularly because, being contemporaneous, it is the best evidence of what was happening at that stage. Ms Howse prepared some minutes of part of a meeting that she attended between the applicant, Mr McGuirk and Mr Bill Gianappolous. The minutes refer to a discussion about the applicant's entitlement to claim commission based on a number of accounts. There is a reference to the AMP and Qantas in particular. An arrangement was made for Mr Gianappolous to accompany the applicant on calls to secure business. Mr Gianappolous said that the parties would meet again the following Monday, which is clearly a reference to 17 May 1999. On that occasion, the applicant would have created a list of all accounts that she had said she had secured so that the respondent could check her entitlement to commission. A further meeting was scheduled for Friday 28 May 1999.
40 Notwithstanding this arrangement, the applicant was given a letter from Mr McGuirk dated 17 May 1999 which referred to the meeting the previous Friday but which also said, in part: "This letter is to be considered an official warning. Unless there is a remarkable improvement in your performance to budget within the next four weeks, we may have to review your ongoing employment with Allied Express."
41 The applicant saw Ms Howse on the following day at about 2pm saying that she was upset and that she wished to work from home. By letter that day to Mr McGuirk, the applicant wrote complaining that a number of accounts had not been credited to her, that the respondent was seeking to impose a commission rate of 1% when she was clearly entitled to 5% and that the respondent was seeking to unilaterally alter her employment contract. She also complained that Mr Gianappolous had sworn at her and had spoken to her in an inappropriate manner that she found to be "distressing, intimidating and harassing."
42 On 19 May 1999 the applicant's husband delivered to the respondent a medical certificate stating that she was unfit for work and a further certificate was issued covering the period 24 - 28 May 1999.
43 On 24 May 1999 Ms Howse wrote to the applicant setting out the history of the matter and asking her to make contact to arrange an appointment to discuss a number of issues including the applicant's work performance and allegations which she had made concerning the behaviour of a number of executives within the respondent's organisation. The applicant responded by letter dated 24 May repeating her allegations.
44 I should add that by an internal memorandum Mr Giannappolous confirmed that he had sworn during the course of a meeting with the applicant and acknowledged that he had acted in an unprofessional manner. He said that he regretted the use of his "bad language" and would apologise for that. He explained his behaviour by reference to his frustration in dealing with the applicant.
45 On 26 May 1999, Ms Howse again wrote to the applicant indicating that she was awaiting contact to make an appointment so that all issues might by discussed with the managing director. There was concern that the applicant had abandoned her "employment responsibilities."
46 This elicited a response dated 4 June 1999 from the applicant complaining that her sick leave had not been paid and indicating that if payment had not been made by 4pm that day, she would regard herself "as having been terminated."
47 The applicant said that she had provided the respondent with a further medical certificate for the period 30 May 1999 to 4 June 1999. That medical certificate was not contained within the respondent's records. However, Ms Howse said that she may have received three medical certificates from the applicant. Despite the evidence of Ms Howse that she did not doubt that the applicant was ill during these periods, there was evidence that the respondent had hired a private investigator. By facsimile dated 31 May 1999, Ms Howse asked a private enquiry agent to conduct surveillance of the applicant, which was carried out on 1, 2 and 3 June 1999. The surveillance activities did not disclose any conduct on the part of the applicant inconsistent with her assertion that she was ill at the time and not otherwise in employment.
48 By letter dated 7 June 1999 Ms Howse wrote to the applicant saying that as she had not made contact to arrange an appointment, her employment was deemed to have been abandoned. A further letter from Ms Howse dated 21 June 1999 set out details pertaining to the termination of the applicant's employment and indicated that she had been paid one week's pay in lieu of notice together with accrued annual leave as at 18 June 1999.