Adams v Chute Industries Australia Pty Ltd [2003] QIRC 101 (2003) 173 QGIG 591

20 June, 2003 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 591 ########################################################################################################################### QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 74 – application for reinstatement William Roy Adams AND Chute Industries Australia Pty Ltd (No. B1308 of 2002) DEPUTY PRESIDENT BLOOMFIELD 4 June 2003 Application for reinstatement – Witness evidence – Witness credibility – Employee breached duty of fidelity and good faith – Respondent acted fairly – Termination not harsh, unjust or unreasonable – Application dismissed. DECISION Background and relevant facts The Applicant in these proceedings, Mr William Roy Adams, first commenced work with the Respondent, Chute Industries Australia Pty Ltd, in early 1999 as a contract collector and siter of clothing bins used by the Respondent to collect used clothing for various charities. The Applicant worked for the Respondent until the end of 2000 when he returned to Papua New Guinea to run his family coffee plantation. In around April 2001 (shortly after becoming an Australian citizen) the Applicant made contact with the Respondent to seek further contract work. However, the work which he had previously performed was now being performed by a new contractor and there was no work available for him. In the discussions which ensued the Respondent indicated that it would assist the Applicant to set up a company in Melbourne, with two Fijian nationals supplying the funding, to be known as Pacific Clothing Recycle Centre Pty Ltd (PCRC). It was proposed PCRC link itself with a charity and become involved in the collection of used clothing in Victoria. It was also proposed that a branch operation be conducted in Brisbane. It was further proposed that the Respondent and another recycling company in Melbourne contribute towards the set up expenses in return for receiving collections made through PCRC. However, the Applicant did not wish to relocate to Melbourne. Consequently, the Respondent arranged with him to place collection bins in the southern Brisbane metropolitan area and on the Gold Coast and collect clothing, and other bric a brac, from those bins under contract to the Respondent. The Applicant’s duties also involved bringing the collected goods back to the Respondent’s factory, sorting them and packing the clothing in bales. The Applicant, who worked alone when performing these tasks, had a key to gain access to the Respondent’s factory. The Applicant was paid an agreed amount for each bale of clothing (of a minimum weight of 180kgs). All expenses involved in the collection, including site rental, was to be paid from the agreed amount. Further, the Respondent agreed with the Applicant that he would be paid a set amount for painting and preparing the bins for delivery to site and an additional amount for each bin sited with full written permission and a lesser amount for those sited otherwise. The evidence was that between mid-2001 and April 2002 a total of 30 bins were placed on sites arranged through the Respondent. Further, a total of 60 bins had been repainted by the Applicant. The Respondent said it had paid the Applicant a total advance of $21,306 against monies earned under the piecework arrangements which amounted to only $9,600. The Respondent’s manager, Mr Doonan, said he received information in mid-April 2002 that clothing was being sorted after hours at the Respondent’s factory and that it was later being sold at the Stafford shopping centre markets by the Respondent and his wife. Mr Doonan said he confronted the Applicant about the allegation on 23 April 2002 when the Applicant admitted he had sold clothing “on a few occasions (but) had only received a couple of hundred dollars on each of these occasions”. In his supplementary affidavit in reply the Applicant specifically denied the allegation that he had sold the Respondent’s clothing at the Stafford markets “as alleged or at all”. However, under cross-examination he reluctantly confirmed the accuracy of Mr Doonan’s evidence. Mr Doonan said he instructed the Applicant at the 23 April 2002 meeting not to sort any further goods at the Respondent’s premises. However, Mr Doonan said that when he returned after the Anzac Day long weekend he found that the entire factory contents had been sorted. Consequently, he arranged for the locks on the factory to be changed to prevent any access by the Applicant. Mr Doonan said that during a visit to the Applicant’s place of residence in early May 2002 he noticed a large quantity of clothing, in sacks and cartons belonging to the Respondent, stored in a garage of the unit next to the Applicant’s. Mr Doonan estimated there was approximately 100 sacks and cartons containing between 1,500kgs and 3,000kgs of clothing. He expressed the belief that the boxes and cartons contained clothing which the Applicant had sorted over the Anzac weekend period and prior. The Applicant argued there were only 8 sacks and 8 cartons and that the pile looked bigger because there were mattresses, fridges etc. behind the sacks and cartons. I do not believe him. Mr Doonan struck me as a reliable witness and someone with his knowledge of the used clothing business would have recognised the difference between 16 sacks and cartons and 100, even allowing for some overestimation. -- 1 of 3 -- 592 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 20 June, 2003 Mr Doonan said he confronted the Applicant about the sacks and cartons of clothing. He said the Applicant told him it was Mr Joe Nepal’s family’s personal clothing to be sent to Papua New Guinea. Further, Mr Doonan said the Applicant told him that Mr Nepal had been in the Respondent’s factory and had “borrowed” the sacks and cartons. Mr Doonan said he told the Applicant that he believed the sacks, cartons and clothing were the property of the Respondent and he asked the Applicant to return them to the Respondent’s premises. Mr Doonan said that the sacks and cartons were not returned. Mr Doonan also said he had not been able to pursue the issue of the clothing because of the difficulties associated with proving the Respondent’s ownership of the goods. Because of all of the above events – together with the discovery of a facsimile sent from the Respondent’s premises on behalf of a competitor (below) – Mr Doonan concluded that he could no longer trust the Applicant to perform the work he had been engaged to do (i.e. use the Respondent’s truck to collect used clothing from the Respondent’s collection bins, bring it back to the warehouse and sort it before packing it in bales – all without supervision) and that he would only employ him on other available work until a meeting could be arranged with the representative of the Fijian shareholders of PCRC (the representative being Mr Pat Chute – the principal shareholder of the Respondent) to map out the Applicant’s future. Consequently, the Applicant was assigned the task of repairing and painting the Respondent’s collection bins at an agreed hourly rate. By 27 July 2002 all of the clothing bins had been repaired and painted and the Respondent offered no further work to the Applicant. The Applicant’s application for reinstatement alleges that, in all of the circumstances, the Respondent breached it’s contract of employment with the Applicant by refusing to offer him work after 27 July 2002 in circumstances that were unjust, harsh and/or unreasonable within the meaning of s. 73 of the Industrial Relations Act 1999. Other material which emerged from the evidence In his affidavit of evidence the Applicant alleged that his duties were changed in May 2002 because Mr Doonan employed his wife’s niece and her boyfriend. However, Mr Doonan said the new employees had not commenced as casual employees until on or about 20 June 2002. I believe Mr Doonan. Under cross-examination the Applicant also acknowledged he had been instructed at the time of his engagement not to have any dealings with a competitor of the Respondent, a Mr Kimisopa. However, the Applicant conceded that he had sent a facsimile from the Respondent’s premises on behalf of Mr Kimisopa to Mr Nepal in Papua New Guinea on 20 February 2002 in relation to the shipping of a container of “virgin stock – unsorted used clothing” worth AU$15,000. Mr Doonan said that checks of the Respondent’s telephone records showed that there had been “over 100 overseas calls” from the Respondent’s telephone number in the month of February 2002. Many of these calls were to Mr Nepal’s telephone number. The Applicant reluctantly conceded under cross-examination that he had “frequently” used the Respondent’s telephone to make calls to Papua New Guinea claiming that these calls were to his mother. Mr Doonan also said that the Applicant told him at the 23 April 2002 meeting (above) that he was unhappy with the payments he was receiving for collecting clothes from the recycling bins and that as a director of PCRC he was also entitled to receive profits from the clothing sold as well as payments for collecting the goods. Mr Doonan said he directed the Applicant to the manager of the Victorian recycling company because he (Mr Doonan) had no knowledge of PCRC’s activities in Victoria and PCRC did not operate in Queensland. The Applicant argued that the bins he sited in Brisbane and on the Gold Coast were for PCRC. Mr Doonan denied this saying they belonged to the Respondent and were for charities linked to the Respondent. Given the absolute lack of any evidence from the Applicant about any charities with which PCRC may have been linked in Queensland I accept Mr Doonan’s version. The Applicant also said he believed he was dismissed because of his involvement in PCRC and because he started to ask questions about what was happening. He claimed that neither Mr Doonan nor Mr Chute would tell him what was happening and that Mr Doonan was preventing him from seeing correspondence relating to the PCRC operation. The Applicant also alleged that at a meeting with Mr Chute in May 2002 he was told that Mr Chute wanted his resignation as a director of PCRC because he (Mr Chute) wanted to run the company his way. The inference was that the termination of the Applicant’s employment by the Respondent was linked to the dispute about PCRC. However, Mr Doonan said the decision to change the Applicant’s duties in early May 2002 was made because of the fact he had lost faith and trust in the Applicant and because he was no longer prepared to allow the Applicant to continue to collect used clothing and sort it because it was impracticable to arrange any supervision. Again I believe him. Firstly, the Respondent had ample evidence to support the decision. Secondly, the meeting with Mr Chute did not take place until after the Applicant had been relieved of his collection and sorting duties. Thirdly, Mr Doonan’s behaviour at the time was consistent with his evidence about the events as they unfolded. Fourthly, the Respondent’s practices – where the collectors performed the tasks alone and had 24 hour access to the Respondent’s factory – meant that it was impossible for the Respondent to allow the Applicant to continue in his previous role. Was the termination harsh, unjust or unreasonable? After considering all of the evidence in this matter I have concluded that the Respondent’s decision not to offer the Applicant further work after 27 July 2000 was not harsh, unjust or unreasonable. Rather, the Respondent acted very fairly by providing a period of further work from early May 2002 until 27 July 2002 when it could, on the evidence available at the time, have reasonably terminated the Applicant’s employment at the beginning of May 2002. This was because the evidence clearly showed that the Applicant breached his duty of fidelity and good faith by acting dishonestly and contrary to the interest of his employer. For example, although denying in sworn affidavits that he had sold any of the Respondent’s goods “as alleged or at all” the Applicant conceded in evidence that he had taken goods which were the property of the Respondent (and ultimately one of the charities with which the Respondent is linked) and sold them at the Stafford markets. In addition, the Applicant also conceded he had frequently used the Respondent’s phone to make telephone calls to Papua New Guinea. In that regard I record that I do not believe his evidence that he only phoned his mother. Further, the Applicant also conceded that he had used the Respondent’s fax facility to send a facsimile on behalf of a competitor of the Respondent (Mr Kimisopa) to Mr Nepal in Papua New Guinea. In that regard the Applicant claimed he had previously offered Mr Doonan the opportunity to supply used clothing to Mr Nepal and that in sending the fax to “a friend” he was doing nothing wrong. Not only was the suggestion that Mr Doonan was offered the opportunity to sell clothing to Mr Nepal not put to Mr Doonan, I find the whole proposition implausible and reject it. The Applicant knew that Mr Kimisopa was a direct competitor of his employer and acknowledged that he had been instructed at the time of his engagement in mid-2001 that he was not to have any contact with that gentleman. However, the Applicant blatantly disregarded the instruction and directly assisted the competitor to make a sale to someone who was also apparently a client of the Respondent. The Applicant also revealed himself to be a deceitful and untrustworthy employee in other ways. -- 2 of 3 -- 20 June, 2003 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 593 Mr Doonan said that when he confronted the Applicant about the sacks and cartons in the garage the Applicant had told him that Mr Nepal had been in the Respondent’s factory and had “borrowed” sacks and cartons to transport his clothing in. Although that issue was not responded to in the Applicant’s affidavit in reply, and not directly put in cross-examination, I accept Mr Doonan’s evidence. Why the Applicant would have taken Mr Nepal to the Respondent’s factory in the first place, let alone permit him to “borrow” sacks and cartons belonging to the Respondent, was not explained. It was simply inappropriate behaviour and in breach of his duties as an employee. I also accept Mr Doonan’s evidence (ahead of that of the Applicant) that the sacks and cartons were never returned. Notwithstanding my doubts about the Applicant’s reliability as a witness I think it implausible that he would have returned such items directly to Mr Doonan’s house rather than to one of the Respondent’s factories. In my view, the Respondent was entitled to rely upon all of the above material to reach the conclusion, in early May 2002, that it could no longer employ the Applicant on the (piece) work on which he had previously been engaged and which required the Respondent to have complete confidence and trust in the Applicant. As such, it was entitled to remove him from the duties which he had previously performed and act to either terminate his employment or to offer him other reasonable work which it might require and which did not involve the same elements of trust. As the evidence disclosed, the Applicant was offered other piecework, at an agreed rate, repairing and spray painting collection bins. On 27 July 2002, when that work ran out, there was no other available work which the Applicant could perform. Consequently, given the way the Applicant had behaved previously, there was nothing harsh, unjust or unreasonable about the Respondent’s decision not to offer the Applicant any further work after that date. For the foregoing reasons the application is dismissed. The Commission determines and orders accordingly. A.L. BLOOMFIELD, Deputy President. Hearing Details: 2003 6 May Appearances: Mr J.M. Horton, Counsel, instructed by Mr G. McGoldrick of J.A. Sherwood & Co, Solicitors, for the Applicant. Ms K. Carmody, Counsel, instructed by Mr J. Nagel, of John Nagel & Co, Solicitors, for the Respondent. -- 3 of 3 --