WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION PARTIES CHRISTOPHER RICHARD BOON, APPLICANT v. ZEST HEALTH CLUB PTY LTD, RESPONDENT CORAM COMMISSIONER P E SCOTT DATE MONDAY, 8 SEPTEMBER 2003 FILE NO. APPLICATION 1445 OF 2002 CITATION NO. 2003 WAIRC 09285 _________________________________________________________________________________________________________ Result Application dismissed Representation Applicant Mr N Whitehead (of counsel) Respondent Mr E Rea (as agent) _________________________________________________________________________________________________________ Reasons for Decision 1 The applicant claims that he has been harshly, oppressively and unfairly dismissed by the respondent. He seeks compensation for loss and injury said to arise from the dismissal. He also claims denied contractual benefits of $510 for personal training sessions he provided to clients, accrued and pro rata annual leave equal to $3,920, and annual leave loading of $627. The Applicant’s Evidence 2 The applicant commenced employment with B C the Body Club (“BC”) in around March 1997 as a Sales Consultant. In March 1998, he became a full-time personal trainer, and from 1 August 1999, the State Personal Training Manager for the business’s 13 facilities. His duties included overseeing its personal trainers and the personal training system. He was also working as a personal trainer himself. 3 From 14 March 2002, Inspired Life Total Health Club purchased BC and the applicant’s employment was transferred, along with his entitlements (see Exhibit 7). The relationship between Inspired Life Total Health Club and the respondent is not at all clear and was not addressed during the proceedings. In addition to managing the personal trainers, the applicant continued as a personal trainer, having approximately six to eight clients of his own. 4 Within a few months of the respondent taking over, the number of personal trainers under the applicant’s control had increased to around 70. 5 At the time of the applicant’s termination of employment in early August 2002, he was paid a salary of $30,000 per annum. He says that from his personal training of clients he earned additional income, bringing the total salary to $45,000 to $50,000 per annum. The respondent also provided him with a mobile telephone and a fuel card. 6 The evidence from both sides indicates that clients would purchase blocks of personal training sessions. Prior to the respondent taking over from BC those blocks were from 10 to 156 sessions. Vouchers or tickets were then sent to the clients to correspond with the number of sessions purchased, and in the case of BC, these were pink tickets for one hour personal training sessions. Each ticket bore a number. 7 The applicant says that after the purchase of the personal training sessions, it could take up to three weeks and sometimes more for the tickets to be received by the clients as the agreement had to progress through the business’s administrative processes. He says that the client would present a ticket to his or her personal trainer at the beginning of each session but because of the delays between the client entering into the agreement and receiving the tickets in the post, the personal trainer may train a 83 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 3135 client without receiving a ticket but would record it in his or her diary. When the client received the book of tickets in the mail he or she would present the tickets for the previous sessions. The personal trainer kept the tickets for all of the sessions for which he or she provided training. At the end of the pay period, the personal trainer would submit a time sheet or invoice together with the personal training tickets which corresponded to the invoice. According to the applicant, in this way it was possible for a personal trainer to submit tickets for personal training sessions conducted in previous pay periods. It is agreed between the parties that the invoice and the tickets were submitted in a bank coin bag. 8 The applicant says that in his case he would submit a claim for payment of salary, together with a claim for the hours of personal training, and a bag of personal training tickets. The other personal trainers left their claims for payment for the club manager to check and authorise payment. He says that it was the club manager’s responsibility to ensure that the amount of tickets submitted corresponded with the amount on the invoice. Once authorised, the invoices and tickets would then be forwarded to head office. As the Personal Training Manager, the applicant’s claims for payment went directly to the pay office. It is the applicant’s contention that the pay officer would double check the claims for payment. 9 In July 2002, the respondent introduced the Systemised Personal Training (“SPT”) process which applied a different philosophy and training regime, and issued yellow half hour SPT tickets. Clients were encouraged to change over their old one hour tickets for a certain multiple of half hour SPT yellow tickets. The applicant’s evidence is that some of his clients changed most of their pink tickets to yellow SPT tickets although some retained some pink tickets. He says that between 1 and 5 July 2002 when the yellow tickets came into effect he exchanged the following clients’ pink tickets for yellow tickets— • Christine Craig, 42 pink tickets were exchanged for 52 half hour sessions (tickets numbered 9326 to 9345, 9346 to 9377); • Tony Whitting, 29 pink tickets for 36 half hour sessions (tickets numbered 9263 to 9298); • Briony Whitting, 11 tickets for 13 half hour sessions (tickets numbered 9313 to 9325); • Ian Dolby, 10 tickets for 12 half hour sessions (tickets numbered 9251 to 9263). 10 The applicant says that he returned those pink tickets given to him by clients to exchange for yellow tickets to head office, and Carol Napier, an employee of the respondent, exchanged them. His evidence as to whether he filled out the details of the tickets exchanged and signed the record, or merely signed the record after Ms Napier had written out the details, is contradictory. He said that is what would happen if someone was in administration but he did not indicate what would happen if no one was available in administration. 11 The applicant says that a diary was kept at each club premises which recorded all the personal trainers’ rosters from Monday to Sunday, 6.00am to 9.00pm. Either the personal trainer or the receptionist would book the training sessions in advance. These sessions were also recorded in a filing system which kept records of each client’s training arrangements, referred to as the A-Z file. 12 According to the applicant, on Tuesday, 23 July 2002, Mr Steve Corrado Paisio, the respondent’s General Manager of State Operations, contacted him and asked him to come into administration and see him. The applicant did so. Mr Paisio told him he had been looking at the pay records of the personal trainer, Joanna Leah, and noted that her work load had increased significantly. He asked the applicant how many clients she had and the applicant says that he told Mr Paisio that he did not know. Mr Paisio then asked if she was doing the amount of training for which she was handing in tickets and once again the applicant said that he did not know. Mr Paisio then asked the applicant to contact Ms Leah, not to say anything to her about the issue, but to ask her to call Mr Paisio directly. The applicant says that he made a number of attempts over a couple of days to reach Ms Leah and ultimately did so. She did not turn up for work again. 13 On Wednesday, 31 July 2002, according to the applicant, Mr Paisio and Mr Kent Desarmia, the respondent’s State Manager, asked the applicant to audit all personal trainers’ invoices and tickets for a particular pay period. The evidence was somewhat confused as to which pay period the applicant was asked to audit, and in which pay period the applicant is alleged to have submitted a bundle of tickets not previously issued to clients. However, the parties later informed the Commission that they were in agreement that the pay period in question was that ending on 15 July 2002. I am unsure as to whether that is the pay period audited by the applicant, or the pay period in which he is alleged to have submitted the tickets. In any event, the applicant says that he conducted an audit over the next couple of days. He was also asked to telephone clients on the pretext of seeing how the personal training sessions were going, and to communicate with club managers over this issue. In this audit process, he says that he found that about 20 personal trainers had submitted incorrect invoices for a variety of different reasons. 14 The applicant also says that on Thursday, 1 August 2002, there was a regular fortnightly managers’ meeting at which Mr Paisio said that he had found a personal trainer stealing. Mr Desarmia did not mention any names when referring to the personal trainer who had been found stealing, but the applicant believed that it was Ms Leah. Mr Paisio also said that he had taken home the unused pink one hour tickets which had not been sold to clients and that his children had cut them up. 15 On Friday, 2 August 2002, at approximately 3.00pm, the applicant says he submitted his report on the audit he had conducted. Later that afternoon, he left administration to drive to the Kingsley club to conduct a personal training session scheduled for 5.30pm. While on his way there he received a call from Mr Paisio asking him to return to administration. He did so after the training session, arriving at about 6.15pm to 6.30pm. There he met Mr Desarmia and Mr Paisio. They indicated an intention to go to the police regarding Ms Leah and the applicant says that he agreed with this. However, according to the applicant soon after informing him of this they suggested that he had had an affair with Ms Leah, and that he had bought her a car, furniture and other items. He says that he denied this. They then questioned him regarding the pay for the period ending 15 July 2002. The applicant says that Mr Paisio held up a wad of pink tickets saying that they were in sequential order and that they were tickets the applicant had handed in. The ticket numbers were mentioned to him as being 76014 to 76066. 16 The applicant says that Mr Desarmia also held up an exercise book saying that all personal trainers’ clients’ tickets were recorded there and there was no record of those tickets having been allocated to any client. 17 The applicant says in his evidence that he was aware of the exercise book as Ms Napier had used it to record the details of the clients’ pink tickets which he had exchanged for yellow tickets on their behalf and had signed for in July 2002. The applicant understood that this book was also the record of the ticket numbers of tickets sent out to clients and the date upon which they were sent. The applicant says that Mr Desarmia and Mr Paisio accused him of theft and said that everyone knew where the unsold tickets where kept. The applicant asked who knew. Mr Paisio said even his wife who had recently been employed knew where they were kept. 18 Mr Desarmia and Mr Paisio were also said to have asked the applicant to help them understand the ticket system and to work out how he could hand in a large wad of tickets in sequential order. The applicant said that he told them that he did not understand the ticket system administration. 19 The applicant said that Mr Desarmia told him that he was taking the matter to the police. The applicant says in his evidence that he agreed to this. 3136 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 83 W.A.I.G. 20 The applicant says that he got out of his chair and walked towards the door at which point Mr Desarmia said to him that if he walked out of the door his job was in jeopardy. The applicant came back and sat down. He told them that he felt that somebody had been setting him up and that he was in disbelief about the situation. The applicant then gave his clients’ names and asked Mr Desarmia and Mr Paisio to call his clients. The applicant says that he then got up and walked out, notwithstanding what he says was a further threat to his job. 21 That evening the applicant spoke to his girlfriend’s father, a solicitor, and also to one of his clients, Tony Whitting, who also appears to be a friend. 22 Also later that evening, Mr Desarmia rang the applicant and told him that the matter was sorted out, not to worry about it, to come in on Monday, that it would be business as usual and that no one needed to know about it. The applicant says that his response was “ok”, and hung up. 23 On Monday 5 August 2002, the applicant returned to work. For the next couple of days he received only limited contact from Mr Paisio or Mr Desarmia. On Wednesday, 7 August 2002, Mr Paisio called the applicant and asked him to come into administration at midday on Thursday, 8 August 2002 for a meeting. 24 The applicant attended Mr Paisio’s office as requested, and in the room with Mr Paisio was a new area manager, Alex Lakevic. The applicant said that he sat down, Mr Paisio handed him a letter saying that it was from Sydney administration, and asked him to read it. This letter, formal parts omitted, says— “RE: TERMINATION OF YOUR EMPLOYMENT CONTRACT WITH ZEST HEALTH CLUBS As you are aware we have undertaken a complete investigation of our concerns that you have been fraudulently submitting personal training dockets for payment to yourself when in fact that work was not undertaken. Our investigation has included interviews and discussions with clients who are the subject of your claim for payment. We note that when we provided you with an opportunity to respond as to the facts and seriousness of these allegations you did not provide any facts that exonerated your actions. We are led to believe that the allegations are founded and that you have been engaging in a wilful misconduct of the most serious nature. Given all of the above we have no other recourse but to terminate your employment with Zest Health Clubs without notice. We will require you to immediately return all company property in your possession including membership cards. Any property that you have away from the club must be returned within 3 days of receiving this letter. In addition you should consider this document as a letter of demand and to that extent you have 14 days to return all monies which have been unlawfully obtained by you under the above process. Should you not return these monies by that time we will without further discussion hand this matter over to the Police for complete investigation and as necessary criminal prosecution. Any monies that are legitimately owed to you by Zest Health Clubs will be paid to you within 7 days but not until after the company property held by you is returned.” 25 The applicant says that he read the letter then asked if he could contact his lawyers. Mr Paisio said that he could not and the applicant then asked if he could gather his personal belongings to which Mr Paisio agreed. Mr Lakevic then walked with the applicant to his office, and the applicant left the premises. 26 The applicant also says that some time prior to the termination of employment, Mr Whitting came in to pick up his yellow tickets, and that he and Mr Whitting discussed the ticket system and the swipe card system. The applicant says that he had had concerns about the personal training voucher or ticket system because clients would not receive their tickets on time and he was looking for ways to change the system. 27 The applicant also says that he did not know where the unsold tickets were kept and that he was not aware of whether anyone else knew this information. 28 The applicant says that he does not recall submitting tickets 76014 to 76041 and 76047 to 76066 on 15 July 2002, and denies submitting them. The applicant says that if a client had trained for one hour, two 30 minutes of tickets would have been submitted. He says that if what the respondent alleges is true regarding the tickets it says he submitted for payment, being those for which he undertook training plus those which the respondent says were never allocated to clients, he would have had to submit around ninety tickets for the pay period ending 15 July 2002. He says that from his experience someone could not have trained that many clients in a fortnight. 29 The applicant says that he subsequently received a call from a Jos Creemers, a personal trainer at Mount Lawley, saying that an email had been sent to every club, advising that the applicant had been dismissed for gross misconduct. Mr Creemers told him that he and every trainer had had to sign the email to say that they had read it. 30 The applicant gave evidence of the contact he had had with other health clubs, efforts he made to find employment and comments made to him regarding what those people understood to be the reason for his dismissal. 31 The applicant gave evidence that subsequent to the termination of the employment by the respondent he was employed by another employer on conditions which include that he clear his name, continue with this claim of unfair dismissal and is successful. The applicant’s salary in this new employment is $25,000 per annum, which is considerably less than the salary he received in his employment with the respondent. 32 In cross examination the applicant said that his claims for payment for July 2002 were for training sessions for seven clients. 33 The applicant says that he did not agree with some of the changes brought in by the new owners of the business including the introduction of the half hour personal training sessions. He believed that Mr Paisio did not like him and wanted to get rid of him, however, he could give no particular reason for this. 34 The applicant called evidence from Anthony Robert Whitting who had been his personal training client since around March 2001. Mr Whitting says that he and his wife purchased a bundle of tickets between them and that his wife only had one session with the applicant around early March, which I take to mean March 2002, but had her own trainer when they were at Mirrabooka. He says that when they started they were at Mirrabooka awaiting the building of the Kingsway centre which is where they wanted to train, and where they eventually undertook their training. Mr Whitting said that at all times he attended training with the applicant he gave the applicant a voucher or ticket. He gave the applicant approximately 20 odd pink, one hour session tickets to convert to yellow, half hour session, tickets. He used at most half those tickets due to a lack of motivation. 35 Mr Whitting says that he visited the applicant at Claremont BC on two occasions while he was working and just popped in to see the applicant. He went to the applicant’s office. On one occasion, he noticed a bundle of tickets sitting loose on the desk 83 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 3137 and commented to the applicant that security was a bit lax. He thought somebody could grab the tickets which he says were obviously used vouchers, which had been handed in by the trainers. 36 Mr Whitting says that around July/August 2002, the applicant informed him that he was doing an audit on trainers, that about 18 to 20 trainers were double dipping. Mr Whitting says that he suggested some method of scanning gym membership cards to avoid this. He gave evidence of other conversations with the applicant immediately prior to and soon after the termination of employment. 37 Mr Whitting recalls receiving a telephone call from Mr Paisio which he says lasted about two minutes. Mr Paisio asked him how he found the applicant as a trainer and Mr Whitting says that he told Mr Paisio that the applicant was a good trainer. Mr Whitting got the impression that it was a PR call for promoting the half hour sessions. He told Mr Paisio that he enjoyed the one hour sessions. He denies mentioning that he had had a shoulder injury at the time. He says in evidence that he did have a shoulder injury in around 1999. Mr Whitting says that he had 12 tickets remaining when he quit the club. The Respondent’s Evidence 38 The respondent called Steve Corrado Paisio, the State Operations Manager. He gave evidence that he had been employed with the respondent in around May 2002. In his first weeks with the respondent there was a promotion of one hour sessions, with pink tickets. These were discounted in the last weeks of their sale, so in Mr Paisio’s words, there was “a fair amount of pink tickets out there,” (transcript page 70). He says that the process was that the contract would be signed by the client and then forwarded through administration to Ms Napier who would record in an exercise book the name of the person purchasing the tickets, the number and the sequence of those tickets, and they would be sent to the client’s home address. Mr Paisio says that the tickets were originally stored in the applicant’s office, that being the personal training office in the administration building of the then BC Club in Claremont. When he discovered this, Mr Paisio thought that it was not sufficiently secure, and arranged for them to be put in a more secure place, under lock and key. He believed the most secure place was the computer server room which was locked and only one key was kept, in the top drawer of Melissa (Mindy) Pugh’s desk. Ms Pugh had been the receptionist but later became the State Corporate Services Manager. The key was generally accessible to management staff. Ms Napier would go to Ms Pugh and get the key when she needed to make up books of tickets, to send to clients. 39 As to the manner in which personal trainers claimed payment, Mr Paisio says that as they were all contractors, they provided a tax invoice which would come into head office after it had been signed off by the personal training manager, the applicant. These would then go to payroll. He says that the applicant’s approval was treated as being all that was necessary. The payments would then be entered into the payroll summary and payments made to the personal trainers’ bank accounts. Each personal trainer’s tickets would be received in a little banking bag such as a coin bag with a copy of the invoice from the personal trainer. These were typically from an invoice book as the personal trainers were, in his view, conducting their own businesses, and the invoice book was retained by the contractor. After processing by payroll, the invoice and tickets were archived in the administration building at head office. He says that the invoices did not contain the numbers of the vouchers for which payment was claimed. If at a later stage he wanted to know which tickets were claimed by a particular personal trainer for a particular period, he could go back three months into the archive system and open any individual money bag and count out the tickets. The number of tickets would correspond with the amount on the invoice, and the amount should also correspond to the pay record. 40 Mr Paisio says that an audit was originally sought by Mr Desarmia due to it being brought to the company’s attention by the payroll clerk that the system was quite messy. He says that he and Mr Desarmia asked the applicant, who they believed had the best knowledge of the system, to audit a particular pay period and to bring to them any anomalies. He says that the applicant identified 22 anomalies, the largest one being for Joanna Leah. Ms Leah had a significant number of sequential tickets. She had submitted in the vicinity of 50 such tickets, yet she had done 81 sessions. The applicant had signed off on her pay claim “All okay. Chris Boon.” Mr Paisio says that the applicant told them that he had felt cheated and misled into signing off on the payroll for Ms Leah, that he had no excuse other than going back to the fact that he felt cheated. They requested that the applicant contact Ms Leah and have her call Mr Paisio. Mr Paisio says the applicant undertook audits of the two pay periods for July 2002. Mr Paisio says that he and Mr Desarmia then went through the 22 invoices or anomalies that had been identified by the applicant and concluded that other than Ms Leah’s, the mistakes were basic errors and there was nothing to cause real concern. However, in the circumstances, Mr Paisio took the entire payroll home that night to undertake an audit himself. After he went through every personal training ticket that had been submitted for the period from March to July, there seemed to be an anomaly in the tickets that Ms Leah had submitted and there was no record of some of them having been purchased from either BC or the respondent. Mr Paisio then went through the records for every trainer, being around 70 of them. He went through their tickets, one at a time, and found that in the same series of tickets which Ms Leah had submitted, the 7,600 series, a similar chunk of sequential tickets, which had not been allocated to any clients, had also been submitted by the applicant. He says that he went through to satisfy himself that no-one else had such an anomaly. He said that initially he spent three days trying to prove that the applicant would not have been associated with Ms Leah or involved in this arrangement. 41 On around 30 or 31 July 2002, Mr Paisio sought assistance from Ms Napier to understand the ticket allocation system, and how tickets not purchased could end up in the payroll. 42 In the late afternoon of 2 August 2002, having analysed the audit conducted by himself, Mr Paisio together with Mr Desarmia asked the applicant certain questions aimed at identifying whether the applicant had made claims for payment to which he was not entitled. Mr Paisio says he explained to the applicant what he had found in relation to Ms Leah. They asked him to confirm their assumptions that if Ms Leah had conducted herself in the way that it appeared that she had, whether that would constitute some sort of scam. Then, he asked the applicant if her conduct had been able to be described in that way and, that similar conduct on his part was discovered, what that would mean? 43 Mr Paisio says he asked the applicant two specific questions, the first one was whether the submission of 40-50 sequential tickets by one personal trainer in a pay period indicated that the trainer was “scamming” the company on the basis that it was not reasonable or possible to train a client so many times in that period. He says the applicant answered “yes – you can’t train a person physically that many times in a fortnight”. He says that he then asked the applicant if there was “no record found in our exercise books, no company receipts for any monies received for those tickets, would that not be the second sign of a scam?”. He says the applicant said “yes, most definitely,” (transcript page 75) and said that there could be no other explanation. Having established that, Mr Paisio said to the applicant that he had been through the personal training ticketing system himself and his concern was that the applicant had done exactly the same as Ms Leah. Mr Paisio says that they invited the applicant to assist them to consider the matter further and to provide any explanations or suggestions. 44 The applicant could not give an explanation of how it was possible. The applicant then said that he had forgotten something, that it was possible that a large number of sequential tickets could have been handed in and there was no record of purchase, at which Mr Paisio said to the applicant that he had asked him that question three times and why was it possible that this could happen. The applicant is said to have replied that he did not understand the way the personal training ticketing system worked. Mr Paisio said that as the State Personal Training Manager the applicant was the head of the ticketing system and if there were 3138 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 83 W.A.I.G. any queries on personal training he ought to have been able to answer them. He said to the applicant that he needed the applicant’s help to clear his name and as it appeared that he was doing the same as Ms Leah then the applicant would need to establish his innocence. 45 Mr Paisio says that at this stage Mr Desarmia asked the applicant what his relationship was with Ms Leah, to which the applicant said that he hardly knew her. Mr Paisio said that it was unusual if the applicant did not know her as the Kingsway club was both the applicant’s and Ms Leah’s home club. 46 Mr Paisio says that they put questions to the applicant about whether he had purchased items for Ms Leah and what was her last known address. The applicant said that Ms Leah had obviously moved, he said that he did not know whether she was having financial difficulties, but he did know that she was renting. 47 Mr Paisio says that the applicant became distressed and defensive, he refused to touch the tickets and got up to leave the room. He was advised that if he chose to leave the room it may place his position in jeopardy. He came back in but did not further assist in the discussions. He said that he was being set up but would not say by whom. The applicant is also said to have claimed that everyone knew where the tickets were kept and could go and get them and submit them. 48 Mr Paisio says that the invoice by which the applicant is said to have claimed payments for the unallocated tickets was not put to the applicant in the meeting. 49 The discussion apparently continued in this manner for a while until the applicant said that he was then leaving. 50 Mr Paisio says that later in the evening, he got a phone call from Mr Desarmia who said that he liked the applicant and was concerned for him. He says that Mr Desarmia had a theory, which he has since found was incorrect, that a person under extreme threat of losing his or her job, or who was dismissed, on a Friday may be at high risk of suicide over the weekend. One of Mr Desarmia’s policies was that no one would ever be finished up on a Friday but would always come in for discussions on the Monday. Accordingly, Mr Desarmia said that he wanted to ring the applicant and put his mind at ease and, as Mr Paisio understood it, that occurred. Mr Paisio said that he believed that it had been a mistake to have had the applicant continue in employment beyond that point. He says that the applicant attended for work over the next week. On Monday, 5 August 2002, he had spoken to the applicant in his office and reassured the applicant that had he done nothing wrong, there would be no problem. Otherwise, he and the applicant had no further discussion until Wednesday, 7 August 2002. 51 Mr Paisio says that as part of his investigation he telephoned a number of the applicant’s clients, including Mr Whitting, on the pretext of a public relations call. He asked Mr Whitting who his trainer was and Mr Whitting said that it was the applicant, and said that he was great. Mr Paisio said that he asked Mr Whitting how regularly he trained with the applicant and Mr Whitting said “I have been off with a shoulder injury”. He had fallen off his motor bike and was out of action for some months and he had only just started back at personal training with his wife, Briony, the night before, the Tuesday night, so they had only done two sessions, the Monday and the Tuesday. He asked Mr Whitting what he thought about the half hour training sessions and Mr Whitting is said to have told him that he had to try it first before he purchased any or before he swapped his tickets over. 52 Mr Paisio says that he also called Mr Ian Dolby, another client of the applicant, who was very positive in his comments about the applicant’s training. Mr Dolby told him that he had not been training regularly as he had been overseas, he had been a bit slack and was getting back into training. Mr Paisio says that he could not contact Ms Christine Craig as her details had not been updated and she appeared to have moved. He spoke to one other person whose name he could not recall, he said the person’s name was referred to in his (Mr Paisio’s) diary notes, however, those notes were not produced during his evidence. 53 During the course of the week, the respondent considered the matter further. This included consultation with its industrial advisers and, according to Mr Paisio, approximately 36 to 48 hours prior to advising the applicant that his employment was to terminate, the head office in New South Wales made the decision to terminate. The letter of termination was then provided to Mr Paisio. Once he had that letter, Mr Paisio arranged to meet with the applicant on Thursday, 8 August 2002, and he asked Alex Lakevic to attend as a witness. The applicant attended Mr Paisio’s office. Mr Paisio said to the applicant that they had gone as far as they could without his help. They had uncovered everything they could, they were totally satisfied that there was no explanation for the tickets submitted. He told the applicant that he needed the applicant to read the letter which was then given to him, which was the letter of dismissal. The applicant read the letter. Mr Paisio asked the applicant to hand in his mobile phone and his fuel card. He asked the applicant if there was anything that he needed to remove from the office and the applicant said that he had a poster in his room. Mr Paisio said that he told the applicant that Mr Lakevic would take him down to the room and escort him from the premises. He said that the applicant told him that he would like to call his lawyer, to which he replied that he could call his lawyer and talk to him for as long as liked once he had left the premises. 54 Mr Paisio says that the first page of Exhibit 5 is a printout produced by Ms Napier for the half hour session tickets swapped over in the two week period prior to 31 July 2002. He says that he was quite alarmed by this in that it indicated that the entire personal training clientele of the applicant had converted one hour pink tickets to half hour yellow tickets. Considering that the business was having some difficulty with some people changing over because of the cost discrepancy he saw this as surprising. In auditing the pay system, he found that the numbers in this printout did not correspond with those in the exercise book which recorded the numbers of the tickets supposedly distributed to members. Apart from noting Mr Paisio’s concern about this, I am unsure as to its significance in the decision to terminate. 55 Mr Paisio says that he was not so concerned that submitting 48 tickets indicated that a personal trainer was busy in a two week period. Rather he was concerned, firstly, that the tickets submitted were sequential tickets, and, secondly, that they were never recorded as being purchased from the company. He says that Ms Napier then went through all the tickets submitted by the applicant and Ms Leah from 20 March 2002 and did a complete audit. 56 Mr Paisio also gave evidence which appeared to indicate that in addition to submitting the 48 tickets in the 7,600 series, which had not been allocated to any members, the applicant had also submitted 43 other tickets for payment for the same pay period. I am unsure as to that aspect of the evidence, however, I assume that part of Mr Paisio’s purpose in telephoning some of the applicant’s clients was to attempt to ascertain the likelihood of the applicant having conducted such a large amount of training in the pay period. 57 Mr Paisio denied having any intention of attempting to get rid of the applicant. On the contrary, he says that the applicant had a difficult job, that it was the respondent’s intention to provide more personal training managers who would each supervise a lesser number of personal trainers than the applicant was doing. Scaling back was not the issue, it was more the intention to bring on additional personal training managers. Conclusions The Availability of Documents 58 A matter which concerned me during the course of the hearing, which I raised with the parties, was that the documents referred to in the hearing were not introduced into evidence. There were no copies of diaries for training session appointments of the applicant and others (except a copy of a single page, for 2 August, from the applicant’s diary), the A - Z client records showing 83 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 3139 training sessions performed by the applicant, invoices or the tickets said to have been the subject of the claim for payment, copies of original invoices or time sheets. Some of these documents have disappeared somewhere in the process of their provision to and return from the police, or they were simply not provided to the Commission. At one point in his evidence, Mr Paisio indicated that he had some of the tickets “in the bag over there”, and he motioned towards the bar table (transcript page 123). Neither parties’ representative sought to introduce them into evidence. The same applies to the diary notes referred to in paragraph 52 of these Reasons. Mr Paisio referred to the applicant’s pay records in his cross examination. The transcript suggests that he said that they were “… with? Mr Gray?” (transcript page 124). It is most likely that he meant Mr Rea, the respondent’s agent. Those pay records were not entered into evidence. In response to a question from me, Mr Rea said that the pay record is available, but the invoice allegedly submitted by the respondent is not available. The tickets said to have been submitted by the applicant were said to have been made available to the applicant for inspection in Mr Rea’s office, but they were not introduced into evidence. Not only were the documents belonging to the respondent not available, but I note that the applicant, having said that he submitted time sheets, has not made available to the Commission any copies of those time sheets he submitted for payment, (if he kept such copies) and, although I raised that matter with Mr Whitehead, I received no response. Only the documents created as part of preparation for the police investigation or this hearing were available, except for what was said to be a copy of a page of the exercise book which recorded the allocation of tickets to clients. The only primary source of evidence, apart from the copy of the extract from the exercise book, is the oral evidence. There is dispute about whether certain documents were made available and were discovered. I note that before the hearing the applicant’s representative became aware that not all of the documents sought in discovery were available, and the respondent appears to have had some misunderstanding about what was sought but says the documents were provided in discovery. The applicant did not seek an adjournment to enable documents to be located and although there was some implicit allegation that the documents had been improperly denied to the applicant, this was not pursued by the applicant. 59 When the evidence was concluded, the parties indicated a preference for making closing submissions in writing. Immediately prior to the conclusion of the hearing, I expressed my concerns to the parties regarding what was not before me and asked the parties to consider how that ought to be dealt with. The parties decided that they would like to address those matters in writing. However, when they made their written submissions on 27 June and 2 July 2003, neither party adequately dealt with that matter. The respondent did not deal with it at all. The applicant noted again the difficulties encountered in discovery. The only other issue related to the lack of the documents on which the applicant commented was that— “Despite a contrary indication given at the Hearing by the Applicant’s representative, the Applicant wishes to clarify that he did receive a copy of the pay slip showing payment for 56 personal training sessions in the period ending July 2002.” (paragraph 80, Applicant’s Closing Submissions). 60 No pay slip was entered into evidence. Therefore, without the support of documentary evidence, the parties can rely only on their witnesses’ evidence, and that is what I must consider. The Evidence 61 Having observed the witnesses as they gave their evidence, I make the following comments. 62 The applicant’s evidence was at times vague and lacking in detail. His evidence as to the sequence of conversations was less than clear. However, it is to be noted that his cross-examination was not lengthy and did not cover a number of the matters which one might have anticipated. 63 The applicant and Mr Whitting both gave evidence of discussing the security of the tickets. The applicant said he was concerned about the process of tickets being issued, and he discussed this with Mr Whitting. However, the applicant also said in evidence that when Mr Desarmia and Mr Paisio asked him to help them understand the ticket system, he “told them (he) didn’t understand the ticket system in administration.” This evidence was not credible, particularly given the detail he was able to provide in evidence. Further, I find it implausible that the applicant, being the State Personal Training Manager, whose evidence indicates that he had provided tickets which he had swapped for some of his clients including Mr Whitting, did not know where they were kept. For a person in his position within the business, this seems somewhat strange. 64 I also note that Mr Desarmia and Mr Paisio asked the applicant to help them understand how a large number of sequentially numbered tickets could be submitted in the way they asserted – ie in one pay period. The applicant denied knowledge or understanding of the ticket system. He gave them no explanation. However, during his evidence, the applicant said that new clients who had not yet received their tickets could proceed and have training, and they would submit them to their trainer when the tickets were received. I take this to be the applicant’s explanation of how a significant number of sequentially numbered tickets might be submitted by a personal trainer in one pay period, the inference being that up to 3 week’s worth of tickets might be submitted in the one pay period, depending on how long it took for the client to receive them after he or she had signed an agreement to purchase the training sessions. The applicant also says that a client could submit 2 half hour session tickets if they trained for one hour. 65 There are two things I note about these explanations. The first is that the applicant was unable to provide either of them when his employer questioned him, nor did he provide them in the days between the meeting and the termination of his employment. The second is that he acknowledged that it was not possible to provide enough training to cover such a significant number of tickets in a fortnight. He did not seem to have come to the conclusion that the large number of training sessions may have been accumulated over a greater period than 2 weeks on account of the delay in clients receiving tickets, undertaking training without providing a ticket to the trainer and only providing a ticket once the tickets arrived. In any event it seems unlikely, given Exhibit 5, that training sessions, some 48 corresponding to sequentially numbered tickets, could reasonably be provided in two pay periods. It might be that the sequentially numbered tickets were all provided to the applicant’s small number of clients when he swapped the old pink tickets for the new yellow tickets, and they all undertook training in a short period to correspond with the sequentially numbered tickets which he is said to have submitted for payment. Given that the applicant says he signed the exercise book record when those tickets were swapped, this is clearly not the explanation because the respondent says it has no record of the particular tickets concerned having been allocated to clients. Further, and more importantly, there is a record of the tickets the applicant swapped for his clients and they do not bear the 76,000 numbers. 66 Mr Whitting’s evidence was somewhat confused regarding timeframes. He said that he cancelled his membership while the business was still BC, around mid to late 2002, after he found out what was happening to the applicant. He says that this was around July or thereabouts. Yet the other evidence puts the time of the respondent taking over from BC at March 2002. Mr Whitting also said that in early 2002, the applicant spoke to him about swapping over his one hour tickets for half hour tickets, and swapped 20 one hour tickets for him. However, the other evidence is that this occurred in July 2002, not early in the year. This, together with the respondent’s record of Mr Whitting’s attendance (Exhibit B) and Mr Paisio’s suggestion in his evidence, tends to indicate that, in fact, Mr Whitting had not attended the club for some weeks prior to the termination of employment. His attendance record show that his last visits were on 18 and 21 June 2002, around 6 weeks before the termination. In these circumstances, I find that Mr Paisio’s evidence that Mr Whitting told him in their telephone conversation that he had not attended for some time, and that he had injured his shoulder, is more likely to be correct. 3140 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 83 W.A.I.G. 67 Mr Paisio’s evidence was detailed and, although he was particularly nervous during the initial part of cross-examination, he was otherwise confident and clear. His evidence was generally plausible and consistent. Some of his answers to questions were confused, however, I conclude that this was due to the construction of those questions, which sometimes lacked clarity. There was also confusion in the questions asked about documents, as to whether they were documents referred to in the investigation conducted prior to the decision to terminate the employment, or whether they were made available for discovery. 68 In these circumstances, if the tickets were submitted by the applicant as the respondent alleges, there is no suggestion or explanation as to how this could have occurred other than by the applicant, without authorisation, obtaining tickets which had never been allocated to clients, had not been paid for and for which no training was provided, and claiming payment. 69 This matter has caused me a great deal of difficulty due to the lack of documentary evidence and the unsatisfactory cross examination of witnesses on both sides. The applicant simply denies that he submitted for payment a bundle of sequentially numbered tickets, totalling around 48, which had not been paid for or allocated to clients. He simply says he did not do it. Mr Paisio says he discovered a bundle of tickets in the 76,000 series for which there was no record of payment or allocation to a client. He says that these tickets were submitted for payment by the applicant. 70 The applicant does not challenge that the respondent’s ticket allocation and recording system is faulty. He says that Mr Paisio did not like him and was trying to get rid of him. There is no real evidence to substantiate this. 71 I also note that the applicant does not say that the dismissal for misconduct is compromised on the basis that the respondent allowed him to continue working while the investigation proceeded. Nor does the applicant say that the procedure was flawed in that Mr Paisio did not give him an opportunity to respond to what the applicant’s clients said to Mr Paisio in his telephone conversations with them, if those telephone conversations were taken into account in the decision to dismiss. 72 I am left with deciding these matters on the basis of credibility. Do I believe the applicant in his denial, or Mr Paisio in his assertion, that the applicant submitted for payment, unpaid for and unallocated, sequentially numbered tickets? 73 Having observed the witnesses as they gave their evidence, and having considered the plausibility of their evidence on the balance of probabilities, where there is conflict between Mr Paisio’s evidence and that of the applicant and Mr Whitting I prefer Mr Paisio’s evidence. The Tests 74 The Full Bench in Western Mining Corporation Limited v. The Australian Workers’ Union, West Australian Branch, Industrial Union of Workers [1991] 77 WAIG 1079 at 1084 set out the tests to be applied in a case of misconduct by reference to the decision of the Industrial Commission of South Australia in Full Commission in Bi-Lo Pty Ltd v. Hooper [1992] 53 IR 224 at 229, as follows— “Where the dismissal is based upon the alleged misconduct of the employee, the employer will satisfy the evidentiary onus which is cast upon it if it demonstrates that insofar as was within its power, before dismissing the employee, it conducted as full and extensive investigation into all of the relevant matters surrounding the alleged misconduct as was reasonable in the circumstances, it gave the employee every reasonable opportunity and sufficient time to answer all allegations and respond thereto; and that having done those things the employer honestly and genuinely believed and had reasonable grounds for believing on the information available at that time that the employee was guilty of the misconduct alleged; and that, taking into account any mitigating circumstances either associated with the misconduct or the employee’s work record, such misconduct justified dismissal. A failure to satisfactorily establish any of those matters will probably render the dismissal harsh, unjust or unreasonable.” 75 In all of the circumstances, having preferred Mr Paisio’s evidence to that of the applicant and Mr Whitting where it conflicted, and in spite of the difficulties relating to the evidence, I make the following findings. In the second half of July 2002, the respondent was concerned that its payroll arrangements were sloppy and asked the applicant to undertake an audit of the claims for payment by the personal trainers for the pay periods in July 2002. The applicant was required as part of his responsibility to check those claims each pay period. He was familiar with the system of issuing tickets to clients for their personal training sessions, for the client to provide a ticket to the personal trainer for each training session, and for the personal trainer to claim payment by submitting an invoice or time sheet attached to the tickets relevant to the period of the invoice or time sheet. 76 In undertaking the audit, the applicant discovered a number of errors and some minor irregularities. He also reported that one particular personal trainer was “double dipping”. 77 Mr Paisio then undertook his own audit covering a couple of months. I find that he discovered that for the pay period ending 15 July 2002, the applicant had submitted for payment almost 50 sequentially numbered tickets, for which there was no record of sale or allocation to a client. It appears that in the same pay period the applicant also submitted 43 other tickets for payment. Mr Paisio informed himself about the ticket issuing and payment claim system through discussions with Ms Napier. Mr Desarmia and Mr Paisio met with the applicant and put their concerns to him, inviting him to respond, and giving him a chance to defend himself. He was unable to provide any reasonable explanation. 78 Mr Paisio and Mr Desarmia had concerns that the applicant was in some way involved with the other employee who had been abusing the ticket system, and put that to him. 79 Mr Paisio contacted a number of the applicant’s clients and, in respect of Mr Whitting, who I note is a personal friend of the applicant, he concluded that Mr Whitting had not recently attended for training. He also contacted Mr Ian Dolby, a client of the applicant, who reported that he had not attended training recently. 80 A number of days passed between the respondent putting the allegations to the applicant and deciding to terminate the employment. The applicant had the opportunity to give any further explanation in that time. He did not do so, although he was not specifically invited to during those days. 81 I find that in respect of the allegation that the applicant had submitted 48 unallocated tickets for payment, and had approved Ms Leah’s claim for payment for a corresponding group of tickets, the respondent undertook as full and extensive an investigation as was reasonable, which raised serious questions about the applicant’s conduct. In respect of the question of his also having claimed payment for other training sessions in that pay period, the respondent’s investigation appears to have been less than thorough. There appears to have been no examination of the applicant’s diary nor was the issue of the number of training sessions he had conducted put to the applicant. 82 The applicant’s managers met with him and put their concerns about the submission of unallocated tickets to him. They gave him a reasonable opportunity to respond and to defend himself. I am satisfied and find that in the end the respondent concluded, and was entitled to conclude, that the applicant had submitted for payment personal training tickets for which no payment had been made and which had not been issued to clients. Accordingly, he had misconducted himself. It also appeared that he had acted in concert with another employee who submitted a large number of tickets from the same sequence, which 83 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 3141 had also not been allocated to members. The applicant had signed off giving approval to this personal trainer’s claim for payment. 83 In consultation with its industrial advisors, the respondent’s head office in Sydney decided that there was no other alternative but to terminate the applicant’s employment. Although the evidence is not entirely clear, it would seem and I conclude that this means that the respondent considered the options available. 84 The applicant’s conduct, as the State Personal Training Manager in charge of approximately 70 personal trainers and a personal trainer himself, was in breach of a substantial condition of his contract of employment. It is true that a single act of misconduct does not necessarily justify summary dismissal. However, in this case, the conduct was such that it breached the requirement of trust and confidence, and struck at the heart of the contract. 85 Accordingly, I find that on the balance of probabilities, the respondent has demonstrated that the tests set out in Western Mining Corporation Limited v The AWU (supra) have been satisfied. There is no other evidence before me to demonstrate that the summary dismissal was harsh, oppressive or unfair. Alleged Denied Contractual Benefits 86 As to the claim of denied contractual benefits, apart from the letter from Consolidated Fitness Pty Ltd of 8 March 2002, notifying the applicant that BC’s business in which he was employed would be transferred to Consolidated Fitness Pty Ltd on 13 March 2002, and confirming his transfer, there is no evidence of the applicant’s employment conditions beyond his salary. There is no evidence of how much leave was owed, how much was taken, and how much related to the last year of service. There is no evidence of what payment was due for training sessions conducted. 87 Accordingly, I am unable to conclude that the applicant has been denied any contractual benefits. 88 The application shall be dismissed. _________ 2003 WAIRC 09279