WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION PARTIES STACEY SHARON BOOTH, APPLICANT v. NGARINGGA NGURRA ABORIGINAL CORPORATION, RESPONDENT CORAM COMMISSIONER J H SMITH DELIVERED FRIDAY, 17 MAY 2002 FILE NO. APPLICATION 1570 OF 2001 CITATION NO. 2002 WAIRC 05592 _________________________________________________________________________________________________________ Result Applicant unfairly, harshly and oppressively dismissed. Orders made the Applicant be paid $9,000.00 as compensation for injury and $4,127.50 as contractual benefits. Representation Applicant Mr D E Booth (as Agent) Respondent Mr P G Robertson (as Agent) _________________________________________________________________________________________________________ Reasons for Decision 1 Stacey Sharon Booth (“the Applicant”) made an application under s.29(1)(b)(i) of the Industrial Relations Act 1979 (“the Act”) on 30 August 2001 claiming that she was harshly, oppressively and unfairly dismissed by Ngaringga Ngurra Aboriginal Corporation (“the Respondent”) on 29 August 2001. 2 The Applicant also makes a claim under s.29(1)(b)(ii) of the Act, that she has been denied benefits to which she was entitled under her contract of employment (not being a benefit under an award or order), in that she was entitled to be paid the following sums of money— (a) Wages from 28 May 2001 until 29 August 2001 at $600.00 per fortnight grossed up to $1,165.02 per fortnight, for 13.2 weeks pay plus two weeks’ pay in lieu of notice at $582.51 per week, being a total of $8, 854.15. (b) Claim for disbursements at $15.00 per fortnight from 1 April 2000 to 29 August 2001, being 73 weeks or 36.5 fortnights at $15.00 = $547.50, less $220.00 paid to the Applicant, being a total of $327.50. (c) $2,141.97 being pay in lieu of accrued annual leave. (d) $1,883.61 as superannuation, pursuant to the provisions of the Superannuation Guarantee Charge Act 1992 and the Superannuation Guarantee (Administration) Act 1992 (“the Superannuation Acts”). 3 In respect of her claim for unfair dismissal the Applicant claims that she should be awarded the maximum amount of six months’ salary as compensation, assessed at $582.51 per week, being a total of $15,145.26. 4 The Applicant is a qualified Chartered Accountant. She says she was employed by the Respondent, a non-profit organisation as a bookkeeper/accountant. She says she was harshly, oppressively and unfairly dismissed by the Respondent following false complaints to the police including a complaint that she had stolen funds from the Respondent in relation to a cheque cashed by her for repairs to her laptop computer. The cheque was made out as payable to Computer Corp. The police executed a search warrant on the Applicant’s premises on 1 June 2001. A few days later the police advised the Applicant that no charges would be laid and the police investigation was closed. When the police executed a search warrant the Applicant was suspended. Following the police investigation the Applicant continued to be suspended whilst the Department of Family and Children’s Services conducted an audit of the Respondent’s books. Shortly prior to the audit being completed the Applicant says that the Respondent terminated her employment as the Chairperson of the Respondent, Mrs Sandra Butters, advised her that “it was best she did not work for them any longer as one of the managers did not like her.” Issues in Dispute 5 The Respondent says that the Commission has no jurisdiction to deal with the Applicant’s claims as it did not employ the Applicant, that at all material times the Applicant was engaged as a contractor. 6 The Respondent says that even if the Applicant was engaged as an employee that the Applicant’s employment was not terminated by the Respondent. The Respondent contends that the Applicant was suspended in June 2001 pending the completion and preparation of an audit report. The Respondent says that the audit report was not completed until a date in early September 2001. The Respondent says the Applicant “jumped the gun” and repudiated her contract of employment by filing an application for unfair dismissal in the Commission on 30 August 2001 in which she stated that she is not seeking reinstatement as there is no viable working relationship between herself and one of the Respondent’s managers, and the Area Manager of the Respondent’s funding body (the Department of Family and Children’s Services). 7 Alternatively, the Respondent says that if the Commission finds that the Applicant’s employment was terminated by the Respondent, the Respondent has not exercised its legal right to dismiss the Applicant in such a way that was harsh or oppressive so as to amount to an abuse of its right to dismiss, in that the Applicant’s conduct in respect of the Computer Corp payment, justified her termination. The Respondent concedes, however, that if the Commission makes a finding that the Applicant was unfairly dismissed the Commission should find that the Applicant should have been paid two weeks’ pay in lieu of notice. 82 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 1251 The Applicant’s Evidence 8 The Applicant testified that she is currently employed by her father, who owns Thomas Supamart supermarket (“the Supamart”) in Halls Creek. The name of the business is “Westcoast Sports”. She said that her family has run the Supamart for 45 years. When she first left school she attended Curtin University and completed a double major in accounting and business law and also completed a management degree. She returned to Halls Creek after she left university and that while she was there she was employed by the Ngoonjuwah Aboriginal Corporation as their Assistant Accountant. She also did some work for Waringarri Corporation as an Assistant Accountant. She carried out the work as a contractor under the name “Northwest Accounting Services”. 9 In October 1994 the Applicant was engaged to carry out the Respondent’s bookkeeping. She said that she was then working in Kununurra so she agreed to do the bookkeeping for them as a contractor. She did their bookkeeping work for them until 1996 when she returned to Perth. She then worked as an accountant for an accounting firm in Perth. 10 In September 1999 the Applicant returned to Halls Creek to help her father with the implementation of GST at the Supamart. She said she only intended to stay in Halls Creek for a 12 month period as her father was intending to sell the Supamart. At that time she had not married. Her name was then Stacey Thomas. The Applicant said that after she returned to Halls Creek, the then Chairperson of the Respondent, Ms Pearl Gordon, approached her and told her that the Respondent’s Co-ordinator, Ms Karen Wright, wanted to speak to her about doing the bookkeeping. She said she had never met Ms Wright before. She spoke to Ms Wright and Ms Wright asked her to prepare a quote for the bookkeeping. It is common ground that at that time the Respondent’s bookkeeping was being carried out by Lawson’s Commercial Services which was located in Perth. Because they were not located in Halls Creek there were a number of difficulties in providing services to the Respondent and the Respondent found the cost of the service provided by Lawson’s Commercial Services to be very expensive. 11 The Applicant said that she prepared a draft quote on her computer. She says the draft was prepared in January 2000. In the draft she stated “I would be happy to undertake the position commencing 01-03-2000 on the following terms”. The draft then set out a number of terms including proposed weekly hours as follows: “Ngaringga Ngurra Administration 4-5 hours Halls Creek Safe House 4-5 hours I will be given a key to the Administration and Safe House office so that I can easily access information when it is required. If the Committee is satisfied with the above I will perform the services for a fee of— Ngaringga Ngurra Administration $150/week Halls Creek Safe House $150/week” 12 The Applicant said she did not provide the draft quote to Ms Wright because she did not wish to work for the Respondent as a contractor. She said she spoke to Ms Wright and said that she would be prepared to do the bookkeeping for $600.00 per fortnight on a salary sacrifice arrangement. A salary sacrifice arrangement is where an employee agrees to receive part or, in the case of the Applicant, almost all of her remuneration as benefits. She said that Ms Wright wanted to bring down the costs of the bookkeeping services and that the Applicant wanted to receive what she felt was a fair amount of remuneration. She said they discussed the fact that she wanted to be paid $300 per week which equated to $15,600.00 per year for the bookkeeping work, which was significantly less than the amount of $27,000.00 which had been paid to Lawson’s Commercial Services by the Respondent in the previous year. 13 The Applicant produced in evidence a copy of the draft quote. She said the copy produced was obtained as a result of a request under the Freedom of Information Act 1992 to the Department of Community Development. The document was tendered as Exhibit 1 and is dated 17 September 2001. The Applicant says that this document is dated 17 September 2001 as it was printed from her computer records that were seized by the police in June 2001. The Applicant says that the form of the quote was a proforma she used for contract work. 14 The Applicant said that after she spoke to Ms Wright, Ms Wright informed her that the Committee had changed their mind and they did not wish to engage the Applicant to do the bookkeeping. She said that occurred in mid-February 2000. She said that several weeks later she had some further discussions with Ms Wright and came back and forth saying “we do want you”, “we don’t want you”. 15 The Applicant testified that late in March 2000, Ms Wright came into the Supamart in a panic. The Applicant said Ms Wright had informed her that funding had been cut off by the Department of Family and Children’s Services and that Lawson’s were not going to provide the books until they had been paid. The Applicant said that Ms Wright asked her to contact Family and Children’s Services to arrange to get the books back from Lawson’s. The Applicant said she did this and that Ms Wright made it very plain to her that the Respondent wanted her to commence the bookkeeping work. 16 The Applicant said no written agreement was entered into but that she made it very plain to Ms Wright that she would not work for the Respondent unless she could be remunerated by taking advantage of a salary sacrifice arrangement. 17 The Applicant said that the books came up from Perth and there was extensive work to be done. She said the MYOB file and the payroll did not balance, group certificates were due and audit preparation work was required. She also said she also had to assist in the preparation of grant submissions. One was for a Lotteries or ATSIC grant for computing equipment. Another was for domestic violence. She said she worked all weekend preparing the necessary documents for the grants. The Applicant said she wanted to work at the Respondent’s office but that she would be unable to do so during working hours as she was working at the Supamart between 9.00 and 5.00 each day. She said that Ms Wright had said she would organise a key for her but that did not eventuate. She said Ms Wright later informed her that they did not want her working in the office. The Applicant said she agreed to carry out the work from her premises because Ms Wright informed her that the office was too small and they did not have any facilities. I understand what she meant by “facilities” is that there was no computer that the Applicant could use at the Respondent’s office. 18 The Applicant said that the terms of her engagement were such that she would always be paid $600.00 per fortnight except if there was some abnormal overtime to be carried out, which was in relation to audit matters or one-off matters. She said that she negotiated with Ms Wright to work 8 – 10 hours a week and that was the basis on which she agreed to work for $300.00 per week. She said that she prepared all of the wages each week and they were prepared on a wages cheque requisition form. She said as with all other employees of the Respondent, her wages were prepared by generating a wages cheque requisition form each fortnight. The Applicant said that different requisition forms were used for payments of invoices (accounts). She said she did not fill out a time sheet because the agreement was that she would be paid $600.00 each fortnight except when she worked abnormal overtime. She said that if she ever prepared any correspondence for the Respondent whilst she was engaged by them, she used their letterhead and this was different to when she had worked as a contractor for the 1252 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 82 W.A.I.G. Respondent in 1994 to 1996. She said when she worked as a contractor, if she sent any correspondence on behalf of the Respondent she sent it on her own letterhead namely, “Northwest Accounting Services”. 19 The Applicant said that when she was working at the Supamart during the day she had to cover the till so she could not leave the Supamart. Consequently if any of the Respondent’s employees had any issues that they needed to be dealt with by her they came across to the shop. She said it got to the point where her customers were complaining and her store manager was complaining that the store was suffering. She raised the issue with Ms Wright and on 5 January 2001 Ms Wright wrote a memo to the Respondent’s staff members saying— “Stacey has brought to my notice that Staff are going direct to her. If staff have any issues they are to raise these with the Manager who in turn will notify myself and I will raise the issue with the Bookkeeper during the time allocated for the services of Ngaringga Ngurra. The Bookkeeper is not employed full time with Ngaringga Ngurra. It would be appreciated that Staff of Ngaringga Ngurra do not approach the Bookkeeper direct.” 20 The Applicant said that she took direction from Ms Wright but she also took some limited direction from the Safe House Manager, Ms Jennifer Heritage. She said she also took some direction from Ms Sandra Butters who became the Chairperson of the Respondent in early 2001. 21 The Applicant testified that she took leave on a number of occasions over the first twelve months of her employment. In July and August 2000, she went to the Greek Islands. She said she spoke to Ms Wright prior to making the decision to go and arranged to take unpaid leave, as she had not yet worked twelve months for the Respondent. She said she requested permission from Ms Wright to go and that she (Ms Wright) gave her permission. She conceded that she did not fill out any written application for leave. 22 One of the principal issues in dispute in this matter is the basis of the salary sacrifice arrangement participated in by the Applicant and other persons engaged by the corporation. It is maintained by the Respondent that Ms Wright and Ms Butters (as the Chairperson) did not understand how salary sacrificing worked. The Applicant testified that she salary sacrificed her entire salary. She said she discussed this with members of the Australian Taxation Office (ATO) at a meeting with Mr Sam Soliman and Mr Don Maclean at the Respondent’s office on 31 May 2000. The Applicant said that Ms Wright was present at this meeting and that they spoke about the allowability of a 100% salary sacrifice arrangement. She said she specifically asked Mr Soliman whether it was allowable to salary sacrifice to 100%. She said that Mr Soliman informed her— “In the tax legislation there is nothing that specifically states the percentage of your salary that can be salary sacrificed, however, the notes to the Tax Act and the Commissioner’s discussion papers state that an amount of 30% would be considered an appropriate amount or a usual amount.” She said she then said to Mr Soliman “is that the amount you can go to?” and he said “No, well, technically not. The limits for a benevolent institution is $17,000 per year grossed up”, which became roughly $30,000 per annum. He then told her that there was nothing in the Tax Act that says you cannot salary sacrifice 100% providing you stay under the $17,000 limit per year. The Applicant produced in evidence a copy of a letter from Mr Soliman dated 19 February 2002. In that letter Mr Soliman states that he confirmed that he attended a meeting at the Respondent’s office on 31 May 2000. He said that also present at that meeting was the Applicant, Mr Don Maclean and Ms Wright. That letter stated— “As part of any indigenous advisory visit at that time we were discussing proposed changes to Fringe Benefits Tax legislation and the effects it may have on Public Benevolent Institutions who used salary sacrifice for its staff.” 23 The Applicant testified that Ms Wright, after that meeting, became interested in salary sacrifice arrangements and Ms Wright, herself, entered into a salary sacrifice arrangement some time in late August, early September 2000. The Applicant said that she believed that superannuation was not payable on salary sacrifice amounts. She said, however, she later received conflicting advice from the auditor and the ATO in relation to that issue, but at the time in which she entered into a salary sacrifice arrangement, she believed there would be a saving to the Respondent in superannuation payments. 24 The Applicant said that shortly after Ms Heritage was appointed as Safe House Manager, Ms Wright advised her (the Applicant) she was owed a pay rise. Ms Heritage was engaged to be paid $38,000 per annum and Ms Wright was at that time being paid $37,500 per annum. The Applicant said that she sat down with Ms Wright and they worked out she was owed back pay to bring her up to an amount of $40,000 per annum. 25 The Applicant said that when she prepared the wage requisitions, she would make a note on the wage requisitions to indicate the salary sacrifice amounts, whether it was for her or other people employed by the Respondent. She produced a number of wage requisitions. One requisition was for 21 February 2001. On it was noted the amount of $600.00 as paid to Janine Fullerton with a notation “S/S, SB” meaning “salary sacrifice, Stacey Booth”. On that form, as with all other wages requisitions, there are signatures of two Committee members indicating by whom the payment has been authorised. Further, the person who prepared the cheque requisitions also signed the forms. During the currency of the Applicant’s employment usually the Applicant or Ms Wright signed the forms as the person who prepared the cheques. 26 During the Applicant’s engagement a number of issues arose in relation to salary sacrificing. The Applicant said that her relationship with Ms Wright broke down following a dispute that she (the Applicant) had with Ms Wright’s son. The Applicant said that in July 2000 Ms Wright’s son came to Halls Creek. He was a computer technician and he came to install computers at the Respondent’s business. She said that Ms Wright asked her to employ her son. The Applicant said she did so and that just before Christmas 2000 she went to Broome for a week, to be married. Whilst she was away there were problems with Ms Wright’s son, which led to his termination of employment from the Supamart. The Applicant said after he was terminated there was an altercation in the Supamart, during which he threatened to ruin the Applicant personally and professionally. Subsequent to this Ms Wright contacted her and shouted at her about the incident. She said that Ms Wright came to the shop, closed her account and informed the Applicant “I am never coming back in here again”. 27 Prior to that time, Ms Wright and her son had requested that the Applicant loan her son $500.00 so that he could buy his child some clothes. Ms Wright, along with most other employees of the Respondent who salary sacrificed, had accounts at the Applicant’s store which were paid through the salary sacrifice system. In early January 2001 the Applicant said that she told Ms Wright’s son that she needed to get the $500.00 back and that he said to her “Oh, I have spoken to Mum about it. Take it out of Mum’s wages so she gets the salary sacrifice benefit. I am doing some work on the photocopier up at the post office and at the pub and I am getting more than $500.00 for that. I will reimburse Mum for the cash when she gets back to town.” The Applicant then made the deduction from Ms Wright’s pay. Ms Wright at that time was in Katherine in the Northern Territory. Shortly thereafter Ms Wright telephoned the Applicant from Katherine to query why her pay was so short and the Applicant informed her that she had taken out $500.00 for her son’s loan and Ms Wright said to her “What did you do that for?” and the Applicant replied “Well, I thought Daniel had arranged it with you. He’s going to give you the cash when he gets back to town.” She said that Ms Wright informed her that she needed the money to buy an air ticket so the Applicant said that this was not a problem, that she would deposit the money into her bank account by electronic transfer in the morning. The Applicant said she arranged for that to be done by 9.30am the next morning. She said that around that time an issue arose in 82 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 1253 relation to purchase order books that Ms Jennifer Heritage, the manager of the Safe House, wanted to have her own purchase order book. The Applicant wrote a memorandum to the Committee on 12 January 2001 advising the Chairperson, Ms Butters, that there was to be a new bank account established solely for the Safe House and that Ms Heritage was to have her own Safe House purchase order book and Safe House cheque book. Further, that there would be a separate purchase order book and cheque book for the Family Centre, which was run by Ms Wright. In that memorandum the Applicant stated that she confirmed that she was answerable directly to the Committee and so too was Ms Heritage and Ms Wright. The Applicant then left Halls Creek for a short period in January 2001. In that memo the Applicant also confirmed that it was an instruction of the Committee, at the new committee meeting in January 2001, that she was to provide the Committee, for Committee discussion and approval, full wage details of the Respondent’s staff upon her return. 28 On her return the Applicant prepared a memorandum for the Committee on 7 February 2001. In that memorandum she set out the salaries for Ms Wright, Ms Heritage, Ms Rose Stretch, the rate paid to Safe House workers and the rate paid to her (the Accountant). As to Ms Wright, the Applicant noted that Ms Wright had received a pay rise, effective from 4 October 2000. As to the Accountant’s wage, she noted the amount paid was $300.00 per week, with an hourly rate of $35.00. Also in the note of 12 February 2001 the Applicant advised the Committee that she had made a number of requests to Ms Wright that she provide cheque books, purchase books and invoices for past periods, so she could prepare those documents for the Respondent’s auditor and she asked for the Committee to advise Ms Wright that the documents were needed as the auditors were arriving in Halls Creek on 21 February 2001. It is common ground that at that particular point in time that the Applicant and Ms Wright were not directly communicating with each other. 29 The Applicant said that she attended a Committee meeting in February 2001 to explain to the Committee that she was very concerned as it was her view that there were not enough funds available for it to run the Safe House and Family Centre until 30 June 2001. She said that Ms Heritage had raised an issue in relation to Ms Wright’s son, in particular she was concerned that he had been paid for five hours work at $70.00 per hour when he had only done 21/2 hours work and that she (the Applicant) had not seen the invoices. The Applicant said Ms Heritage asked the Applicant to raise this at the Committee meeting. The Applicant said she did so and the Committee members indicated to her that they would investigate this issue. She said she then spent some 11/2 hours explaining the accounts. In particular, she went through printouts of the accounts, explaining items and accounting for her wages and explained the salary sacrifice arrangements. She said Ms Wright was not at the meeting at the same time as she was there, however, she may have attended the meeting when the Applicant was not present. She said she thought that meeting took place on 13 February 2001. Minutes of the Committee meeting for 13 February 2001 were produced. Those minutes do not indicate that the Applicant attended that meeting or spoke about the issues raised by her in her evidence. However, Ms Butters testified that the Applicant did attend a Committee meeting in February 2001. She said that this was the only meeting that the Applicant had ever attended whilst she (Ms Butters) was Chairperson. 30 The Applicant said that about two weeks after the February Committee meeting she received a phone call from Mr Damien Miles, Area Manager of the Department of Family and Children’s Services at Halls Creek. She said that he advised her that Ms Wright had requested a mediation session and that she (the Applicant) was to attend. She said she was told she had to attend at lunch time and that although she had other obligations at that time she complied. She said the mediation meeting lasted over three hours, in two sittings. She said a number of issues were discussed, including Ms Wright’s time sheets and the fact that supervisors needed to sign off time sheets. She said that at the last mediation meeting Ms Wright informed her that she (Ms Wright) had written a letter to the Institute of Chartered Accountants complaining about the negligent way she (the Applicant) was doing the bookkeeping. The Applicant produced a copy of a letter from Ms Wright to the Institute of Chartered Accountants, dated 23 February 2001, in which Ms Wright made a complaint about “… the professional practice of Stacey Thomas who is engaged by the Ngaringga Ngurra Aboriginal Corporation as our Bookkeeper. This is a personal complaint by me, as that organisation’s Coordinator, and relates to the way in which my own pay is handled.” In that letter Ms Wright made a complaint that the Applicant had used her pay to pay off a private bill which belonged to her son and made an unexplained deposit of $500.00 in her (Ms Wright’s) account which equalled the missing pay. 31 The Applicant said that at that meeting Ms Wright offered to retract the letter if she (the Applicant) provided her (Ms Wright) with a letter of apology. The Applicant said that she refused to provide Ms Wright with a letter of apology because she thought it would be used in the town to make it appear that she had done something wrong. She said that she had not done anything wrong, although she conceded she had made an error of judgment. She maintained, however, that as soon as she was advised of the error in her judgment she had immediately rectified it. 32 Following the mediation, both the Applicant and Ms Wright received a letter from Ms Butters. Both of those letters were identical. The letter to the Applicant stated as follows— “It has come to the attention of Ngarringa Ngurra Management Committee that there may be conflictual issues regarding your work, and other staff member’s. These issues are a concern to Ngarringa Ngurra Management Committee, therefore we wish that you could resolve your differences by meeting as individuals to discuss these issues. The Ngarringa Ngurra Management Committee wishes to see that you work professionally, and communicate with all relevant staff directly whilst you are employed by Ngarringa Ngurra Aboriginal Corporation. Ngarringa Ngurra Management Committee hope that this matter can be resolved in a professional, and supportive manner. If you have any further issues please do not hesitate to contact me, or any other members of the committee.” 33 The Applicant testified that she spoke to Ms Butters about the letter and the conflict with Ms Wright and that Ms Butters said that she could not help her (the Applicant) because she worked for the TAFE College, which is run by Ms Wright’s husband. She said that Ms Butters informed her that she could not be seen to be doing anything against Ms Wright. The Applicant said she later received a further letter from the Respondent, addressed to her personally, in which she was informed “The Management Committee is currently revising contracts for employment. Could you please provide a copy of your duty statement to the Committee.” The Applicant said she did not have a copy of her letter because it was seized by the police and that document has not been returned to her. 34 The Respondent’s Committee meeting minutes dated 15 March 2001 record that “Damien Miles (FCS) spoke about mediation between Karen Wright and Stacey Thomas. Committee decision was to write letters to all staff of Ngarringa Ngurra regarding their positions and roles and responsibilities within the organisation which will be salaries, hours, job description, etc.” 35 The Applicant was required to formally respond to the Institute of Chartered Accountants in respect of the complaint. On 9 April 2001 Ms Heritage as Manager of the Safe House wrote a memorandum that was provided to the Institute. In the memorandum Ms Heritage stated that there were 10 staff employed at the Safe House whose wages were prepared by the Applicant. She also stated that to her (Ms Heritage’s) knowledge all are more than satisfied with the Applicant as accountant and the majority of staff untilize salary sacrifice through the Applicant. On 16 May 2001 the Applicant was advised that in relation to the complaint made by Ms Wright, the Institute’s decision was that there were no grounds for any disciplinary action and the file had been closed. 1254 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 82 W.A.I.G. 36 The Applicant testified that after the mediation Ms Wright refused to communicate with her or answer her request for copies of documents for the audit. She said she was having difficulty being able to reconcile MYOB because she was not getting bank statements. She said Ms Wright was the only person with a key to the Respondent’s post office box and she would not provide her (the Applicant) with any information. In a memo to the Committee, addressed to Ms Butters on 20 March 2001 the Applicant outlined a number of issues which were of concern to her, in particular, she stated— “Sandra, The following things are of great concern to me— 1. I am unable to submit the BAS for February which is due tomorrow until I receive from Karen the Bank Statement for the period 1/2/01 – 1/3/01. The bank has advised me that it was posted to her 2/2/01. 2. I had detailed discussions with Leon Steilow yesterday. Leon faxed Karen the draft financial statements that she advise(sic) him she would forward onto me immediately to examine. She didn’t do this, instead she forwarded them directly to Damien at DFCS without my knowledge that they had been received. Leon also stated that he had given Karen questions to forward to me re the Audit, yet I have not received anything from her. In light of these events I have now arrange(sic) with Leon that he is to contact me directly. I had not done this in the past as I believed that Karen would pass on any information to me. Leon stated that in fact Karen had actually told him that as she was the “Administrator” of Ngaringga Ngurra all correspondence had to go through her. Sandra, I just don’t understand Karen realised how bad it looked for Ngaringga Ngurra when Damien rang me to discuss the Financial Statements and I hadn’t seen them. We are trying to give DFCS the impression that things are running smoothly and efficiently, and when events like that happen it shows that in fact they are not. It also looked extremely bad to the Auditor who had relied on Karen. 3. I have not received any mail correspondence from Karen for the past 3 weeks. I am unable to process invoices and unable to process payments, because of this I am unable to provide Jennifer with the monthly budget. Karen had advised in the mediation with DFCS that she would put her personal feelings aside and perform her job as Family Centre Manager in an efficient and cooperative manner. She is not doing this and is acting in a manner that is seriously jeopardising the future of the Family Centre. I have no hesitation in stating that it is my opinion that DFCS are very close to taking the Family Centre funding off Ngaringga Ngurra and that if Karen does not start acting responsibly DFCS will not renew our funding next financial year. I am unable to do or say anything that will make Karen act differently and therefore I write this memo to you. It is extremely important that something is done immediately.” 37 The Applicant testified that despite the memo she sent to the Committee on 20 March 2001 Ms Wright kept saying that she could not get the information, that it was not there. The Applicant said that the Family and Children’s Services Department informed her that the Respondent owed some $60,000 in surplus funds and in order to resolve this issue the Applicant needed the information to prepare the 1998 – 1999 Audits. 38 The Applicant wrote a further memo to the Committee on 17 May 2001 headed “Points to discuss at GM” In that memo she raised a number of issues, including the following— “1. Last year’s audit. Note: importance of Member’s fund deficit. 2. Documentation still not received from KW to allow preparation of 1998 and 1999 re audits. Direction received from DFCS 2/3/01. Stress urgency of committee to get KW to provide these documents. If not provided corporation required to pay DFCS approx. $60,000 which will cause the corporation to go bankrupt. 3. Current year’s financials. Crisis still to receive 1 QTR. Cash award prorated. Family and Poverty have NO funds left. Advise that they should cease operation until 30/06/01. Still need to bring to account employee AL accrual expense. Have removed all accounting costs and put to Crisis. Will have to put all audit costs to Crisis. Advise committee of importance to advise KW that absolutely NO expenditure to 30/6/01. … 7. KW is giving me statements without attached invoices (ie till receipts for Corner store, Supavalu, Buckaroo clothing) to pay. Should not pay without receipts. Advise committee of importance to advise KW to ensure that all receipts AND Blue POs are attached to statements given to me.” 39 The Applicant also produced a memorandum she sent by facsimile to Ms Wright requesting records for the financial year 1998/1999. At that time, Ms Wright had requested the paid invoices file from the Applicant. On 14 May 2001 Ms Wright wrote to the Applicant requesting that she (the Applicant) provide Rose with the paid invoice file. In a memo dated 15 May 2001 the Applicant indicated she would provide that file to Ms Wright on the following Thursday as the committee meeting had been moved back one day. On the same day the Applicant received a phone call from Damien Miles advising her that Ms Wright’s pay increase, paid from October 2000 was unauthorised and that Ms Wright’s salary should be reduced to the authorised salary limit. The Applicant then wrote a further memorandum to the Committee dated 15 May 2001 outlining her conversation with Mr Miles and attaching a reconciliation of wage adjustments, which indicated that Ms Wright had been overpaid an amount of $5,733.22. 40 The Applicant said that on 28 May 2001 Ms Heritage rang and said she needed the paid invoices file. She then came and picked up the file from the Applicant. 41 In March 2001 the Applicant sent her laptop computer to a company in Perth, Computer Corp, to repair the screen. The Applicant said that when she attended the mediation session with Mr Miles and Ms Wright she had taken the computer and files with her and that at the mediation they went through financial statements. She said that while she was at the mediation her computer screen received a crack in the right hand side which slowly got larger. On 23 March 2001 Computer Corp received her computer and provided her with an internal job card which indicated that the cost of the repairs would be about $2,500.00 including GST. The Applicant said that she spoke to Ms Butters about the Respondent paying for repairs to the computer. This conversation occurred when Ms Butters came into the Supamart. The Applicant said she told Ms Butters “My 82 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 1255 computer’s been damaged, Sandra. I’ve cracked the screen. I’m going to need a new screen. It’s expensive.” And Ms Butters said to her “How much was it?” and the Applicant said she told Ms Butters she did not know at that stage and asked, “Would it be okay to have it paid for?” and she (Ms Butters) said “Yes, it shouldn’t be a problem.” 42 The Applicant said she prepared a cheque requisition for payment to Computer Corp for the amount of $2,558.40 on 26 April 2001 and attached a cheque for that amount made out to Computer Corp and a copy of the internal job card, on which she had written the amounts of the original quote and an amount of $2,558.40. She said she put this invoice with a number of other invoices which were due and payable at that time. She said the invoices and cheques were sent to the Committee members for signing. The cheque requisition for Computer Corp indicates that a Ms Butters and Ms Rivers signed the cheque and the cheque requisition. The Applicant said that the cheque was sent to the Committee members about 1 May 2001. She rang and spoke to Computer Corp about picking up the computer. She said they were concerned that there would be a delay in getting the cheque to Perth, banked and cleared, so the Applicant decided that she would pay for the computer through her Visa. The cheque was not sent to Computer Corp. 43 In a memorandum from Mr Hadwin from Computer Corp it is recorded that the computer was expected to be completed by 3 May 2001 but on that date further delays caused the completion date to be revised to 14 May 2001. Delays then occurred again and eventually the parts were received on 22 May 2001. As the service was not completed until that day in compensation for a lengthy delay, the Applicant was granted a discount of $1,000 off the quoted price. Mr Hadwin said in the memorandum— “In accordance with the payment terms the account was required to be settled in full by cash prior to the release of the computer. After discussion with our Accounts Department it was determined that the preferred method of payment was visa, and Mrs Booth supplied her personal visa card details over the phone to cover the full cost of the computer repairs and courier fees to allow the computer to be released. In accordance with her instructions the computer was couriered on 22/5/01 to Mr Damien Miles in Midland.” 44 Mr Hadwin also noted in his memo that the invoice for the cost of the computer repair was placed inside the side pocket of her computer carry case. That invoice records that the total cost of the job was $1,386.45. As the Applicant had already paid for the repairs with her Visa she deposited the cheque in her account. 45 The Applicant said that on Friday 1 June, 2001 she was upstairs at the Supamart and her store manager buzzed her on the intercom at 2.00pm and said “Stacey, the police are here.” She was informed that they wanted to see her. She went downstairs and saw two police officers together with Mr Damien Miles. 46 The Applicant said that Mr Miles informed her that they had a search warrant to seize the Respondent’s books as they had been informed by the Respondent that she had been stealing. She asked why they did not telephone her? Why did they get a search warrant? Why not ask her for the books? Mr Miles replied “We have reason to believe that you have been failing to hand the books across to Ngaringga Ngurra” to which the Applicant replied it was not true, that Ms Heritage had picked up the invoice files two or three days ago. She asked if the police could stay downstairs while Mr Miles went upstairs to her office. She said there were about five customers in the shop at the time and everyone was staring at her. She said she then went upstairs with Mr Miles and the police. They asked her about the Computer Corp cheque. She said she told them it was for a repair to her laptop computer. She was asked whether the cheque had been banked and she told them it had been banked into her bank account because she had paid for the repairs to the computer on her Visa card. She was asked who authorised the cheque and she told them Ms Butters. 47 The Applicant was formally cautioned by the police. She was also asked about a cheque for superannuation. The police then asked her for her details for her superannuation account and fund and she told them it was Allied Buck. She was then asked to give the Police copies of her personal bank records and Visa statements which she produced. The police then downloaded all of her financial records from the computer, including the files for the Respondent. She said Mr Miles told her she was on suspension, pending a full audit and that she was under criminal investigation. 48 The police left her premises. The Applicant said she was very concerned about the investigation. She had just put a deposit on a property and she was negotiating a loan with her bank. She said she was terrified because the police had told her her bank account was going to be audited and she thought this might affect her capacity to obtain a loan. She went to the Police Station. She told the Police she was four months pregnant. She asked questions about who was investigating her. She said she told the police about the incidents with Ms Wright’s son and Ms Wright’s complaints about her. The Applicant then wrote out a cheque payable to the Respondent for the difference between the amount of the Computer Corp cheque and the amount charged to her Visa. 49 On 14 June 2001 the police closed their investigation, having determined there was insufficient evidence. On 12 June 2001, the Applicant later obtained information through a Freedom of Information request about the police investigation. In the police running sheet for the Halls Creek Police Station it is recorded that a complaint was received in relation to the Applicant on 1 June 2001. The running sheet states that several allegations and discrepancies were raised, in particular, there was a complaint that the Applicant had ignored several requests to hand over documents. In the Offence Information System – Offence Report – under the heading “Narrative” the police have recorded the Applicant as the “POI”(person of interest) and stated— “POI is the bookkeeper for the complainant. During that last six months there have been reported discrepancies in the bookkeeping, accounts and superannuation management. POI has been paying herself different rates of pay and utilising complainant cheques to pay off bills directly avoiding tax.” In relation to the alleged offence, in an application for a search warrant it is recorded: “… there are reasonable grounds to believe the mentioned property located at Lot 93 Thomas Street, Halls Creek will afford evidence of the offence Stealing as a Servant and Fraud.” 50 After the police completed their investigation all the records seized by them were handed to the Department of Family and Children’s Services to conduct an audit. The Applicant says that she was informed initially by the police that the internal police were going to audit the books and then she was told that they would be audited by Family and Children’s Services auditors. Then she was later told that there was to be an independent auditor appointed. 51 The Applicant said she went to see Ms Butters and she was told by her to “go away”, that she (Ms Butters) could not talk to her. She said that no one who worked for the Respondent would speak to her or answer her telephone calls. The Applicant said she went to Darwin for a week and when she returned from Darwin she was very distressed. Her waters broke and she was flown to King Edward Memorial Hospital by Royal Flying Doctor and was on a drip for three and a half weeks. Her child was born stillborn. She said that whilst she was in hospital she kept calling a number of people at the Family and Children’s Services Department as she was trying to find out when the audit was being conducted. She was informed that the audit had not started. She said she thought it was cruel to leave her sitting in hospital thinking she was under investigation and the audit had not commenced. She said that after she left hospital and after the funeral for her baby, she was able to find out the name 1256 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 82 W.A.I.G. of the auditors who had been appointed. She went to their office on two occasions. On the second occasion she was able to speak to the auditor, Mr Toms. She said he explained to her that he had not received the files until late July 2001 and he would correspond with her. She testified that she advised him she was happy to assist in any way she could. 52 The Applicant said she returned to Halls Creek on 19 or 20 August 2001. She said she was very reclusive because of the rumours flying around the town about her. She then found out that the Respondent had appointed a new Bookkeeper, Mr Ken Olney. 53 The Applicant said she went to see Ms Butters at her office at the TAFE Centre about four times. She said she was told by Ms Butters that they would have a Committee meeting to talk about settling the issue with the Applicant. She went and saw Ms Butters and she informed her (the Applicant) “It’s best you don’t work for us any longer because one of the managers does not get on with you.” The Applicant said she thought this conversation occurred on 29 August 2001. She said that this was the first time anyone had said anything to her about not doing anymore work for the Respondent. She said she then filed the application for unfair dismissal. She said that the auditor, Mr Toms, came and saw her in Halls Creek on 4 and 5 September 2001. She further said that she had not obtained a copy of Mr Tom’s report despite making requests for it until shortly before the hearing of this matter. 54 In an internal audit review conducted by Mr Toms and Ms S Whittle dated 10 September 2001, Mr Toms recited the factual circumstances of the drawing of the cheques for Computer Corp. In the report he made a recommendation that all expenditure should be supported by an invoice or a receipt of payment. He however did not make any adverse comments in that report that the payment of the Applicant’s computer repairs by the Respondent was unauthorised. 55 In cross-examination many questions were put to the Applicant in an attempt to establish that she was a contractor rather than an employee. Firstly, a number of payroll activity summary sheets from the Respondent’s MYOB system were produced which listed all of the employees of the Respondent. The Applicant was not mentioned on the lists. She conceded she was responsible for imputing the information in the payroll summary sheet but said that because she was engaging in 100% salary sacrifice, she did not require a group certificate and it was from that list that the group certificates were generated. It was also put to her and conceded by her that the general ledger showed that payments to her were accounted for under a heading accounting or bookkeeping and not under the wages column. In response the Applicant said it was good accounting practice to keep the entirety of accounting costs as a one line expense. Accordingly, she coded her salary sacrifice payments under that heading. The Applicant conceded that she did not fill out any time sheets or leave applications. She did not work from the Respondent’s premises yet she said she worked for other Aboriginal organisations and did so from their premises. She also conceded that she did the Respondent’s work whenever she could fit it in with her full time work at the Supamart and her other part time bookkeeping positions. 56 As to annual leave the Applicant conceded that in July/August 2000 she was in Greece for four weeks. Further that she went to Alice Springs for a week in October 2000. In December 2000 she was married and had a week and a half off which included public holidays. In January 2001 she went to Sydney for a week and she used to regularly visit Darwin for a couple of days at a time to visit her husband. Her husband is a pilot who flies out of Darwin. The Applicant said that in relation to each absence she sought permission to go away and organise for someone to cover her work or for her work to be carried out by her before or after she went on leave. 57 Ms Nola Carter gave evidence that she worked with the Applicant for a period of two years between 1994 and 1997 when she, Ms Carter, was employed as the Respondent’s coordinator and the Applicant was contracted as a bookkeeper. Ms Carter said her role as coordinator was to support the Management Committee. She said that at that time they were in the process of establishing a Safe House to complement their other services, which were the Halls Creek Art Centre, an occasional child care centre and a family support service. She said the Respondent’s Management Committee are all volunteers so she was employed to facilitate their plans for the services and to manage the services. She said that at the time she was employed salary sacrifice arrangements were offered to all employees as an inducement to take up positions with the Respondent. She testified that information was given to the Committee about the limits of salary sacrificing and the types of things that could be paid for. She said that at the time she was employed Ms Butters was a member of the Management Committee and that after she left Ms Butters became the Safe House Manager. She said that she was present at Ms Butters’ interview when she applied for that position and said that at that time Ms Butters she was well known in the community. She said Ms Butters had a very good reputation as a reliable and responsible employee. Ms Carter also said that salary sacrificing arrangements were offered to Ms Butters when she was engaged as Safe House Manager. 58 Ms Carter testified that when she commenced work for the Respondent they had not had anyone managing financial affairs for about five months. She arranged for the Applicant to do the book work for the Respondent. In terms of the preparation of cheques for payment to creditors of the Respondent Ms Carter testified that she would write out cheque requisitions and cheques for signing by the Committee. She said she created financial procedures because prior to her commencement with the Respondent the Registrar of Aboriginal Corporations had demanded that appropriate processes be put in place for making payments. Accordingly, cheque requisition forms were created on which all the relevant information in respect of payments was to be detailed. She said it was part of her role as Coordinator to speak to members of the Committee when the cheques were signed. She said it was her practice to make notes on the cheque requisitions so the members would understand the service funding from which the monies were being paid and what the cheques were for. 59 Ms Carter said that the Applicant’s work as Bookkeeper during that period they worked together ensured that by the time she (Ms Carter) left the organisation, the whole process was running very smoothly. She said that at that time the Applicant was paid by the tendering of invoices. There was a maximum ceiling of hours for the work she could be paid for and she was also paid an allowance for certain expenses, such as travelling time. If there were any extra duties she would be paid for those as a type of overtime because it was extra to her contractual arrangements. The Respondent’s Evidence 60 Ms Karen Wright gave evidence that she is employed by the Respondent for 50% of her time as an Administrator and Coordinator. The other 50% of her time she works as a financial counsellor for the Respondent. As to her administrative role she stated that at all material time she has the authority to run the Respondent’s business from day to day. 61 Ms Wright testified that she commenced employment with the Respondent in March 1999. She said that the Respondent was having difficulty with Lawson’s Commercial Services and they decided to terminate the contract. On 8 November 1999 Mary Jarzabek, a Community Development and Funding Officer with the Department of Family and Children’s Services, wrote to the then Chairperson of the Respondent, Ms Pearl Gordon and suggested to the Respondent’s Committee that they obtain a quote from a service in Kununurra to carry out the bookkeeping work. On notes attached to that letter it is noted that the Respondent Committee had decided to terminate the contract with Lawson’s Commercial Services as soon as the 1999 Audited Financial Statements were completed by giving of one month’s notice in accordance with the contract. 82 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 1257 62 Ms Wright said that the Applicant came into the Respondent’s office and someone told her that the Applicant was an accountant. Ms Wright said shortly after that she met the Applicant socially and the Applicant confirmed that she was an accountant. She (Ms Wright) told the Applicant about the difficulties the Respondent was experiencing with their accounting services and the Applicant informed her (Ms Wright) that she would “love to do” the bookkeeping for the Respondent. Ms Wright said she asked the Applicant to put in a quote. She said the Applicant submitted a quote on the basis of contract work for $35 per hour. Ms Wright identified Exhibit 1, the document produced by the Applicant, as a copy of the quote that she had received. She said she received a signed copy of that document around January 2000. The Respondent, however, did not produce a signed or unsigned copy of that letter dated January 2000. Ms Wright said that the Committee advised her that the Applicant’s quote was accepted and she informed the Applicant that the quote was successful. She testified she informed the Applicant that she had to give Lawson’s Commercial Services one month’s notice. Ms Wright produced a copy of an unsigned letter from her dated 1 March 2000, to Lawson’s Commercial Services, stating: “In accordance with the agreement between Lawsons and Ngaringga Ngurra, please be advised that the Committee are giving one months notice to withdraw from the contract. As of 1/4/2000 the services of Lawsons will no longer be required. All Financial books and records relating to the Financial Management of Ngaringga Ngurra are to return promptly to the Family and Children’s Services, marked for ATTENTION, Mr Sherif Andrawes Corporate Finance and Consulting Manager BDO Nelson Parkhill PO Box 7426 Cloisters Square PERTH 6850” Ms Wright said she informed the Applicant she could commence on 1 April 2000. 63 It was put to Ms Wright in cross-examination that she had not sent the letter to Lawson’s Commercial Services on 1 March 2000 terminating their services from 1 April 2000. Ms Wright maintained this was the case but could not explain why Lawson’s had not been paid until the beginning of April 2000. Ms Wright agreed that this should have been the case. It was also put to her in cross-examination that the last account that was paid by the Respondent to Lawson’s Commercial Services was in November 1999. Ms Wright was unable to give any explanation for this. She said she did not prepare the payment of accounts at that time. Further, she could give no explanation as to why Lawson’s Commercial Services did not render the Respondent with an account for the period from November 1999 until April 2000. 64 Ms Wright said that she recalled attending a meeting with the Applicant and officers from the ATO on 31 May 2000. She said the prime purpose of the meeting was for the ATO officers to discuss the impact of the GST. She said that she recalled that the Applicant asked them about salary sacrifice and that they advised her that was not something that they could give advice on because it was not their area and that they were in Halls Creek to discuss GST. Ms Wright’s evidence was that at that time she knew nothing about salary sacrifice. 65 Ms Wright testified that during the engagement of the Applicant, the Applicant would regularly advise her (Ms Wright) that she would be going away for a period of time. She said the Applicant did not seek her permission and she did not fill out any leave applications. She said employees of the Respondent were required to fill out leave applications. In particular, she testified that when she went on leave she would fill out a leave application and have it signed by a Committee member. However, when a leave application for her to take leave was put to Ms Wright in cross-examination, that was filled out and authorised by her, she conceded that on that occasion she had only sought the verbal approval of the Committee. 66 Ms Wright testified that not long after the Applicant returned from Greece, in mid 2000, the Applicant raised the issue of salary sacrifice with her and the Applicant advised her (Ms Wright) that you could salary sacrifice food bills, credit card accounts. She (Ms Wright) then opened up an account at Supamart and entered into a salary sacrifice arrangement which enabled her account at the supermarket to be paid as a benefit under her contract of employment. Ms Wright said she was not happy with the arrangement because more than minimum payments were paid on her credit card and she never knew from fortnight to fortnight how much cash she was going to get in her hand. She said she told the Applicant in December 2000 that she did not wish to salary sacrifice anymore. 67 Ms Wright said she did not direct the Applicant in her field of bookkeeping and accounting as her knowledge of accounting was not to the standard of the Applicant. She said that she did not give her any directions. She said, however, that when the Applicant was away she would normally write out the cheques and cheque requisitions. She said that there was one occasion that she did the payroll but she did it by hand and then the Applicant entered it into the MYOB system after she returned. 68 Ms Wright was asked in evidence to look at a cheque butt and a salary requisition form dated 14 December 2000 which was filled out by her (Ms Wright). The cheque butt and the attached cheque requisition states that a payment of $820.00 was made payable to Thomas Store for bookkeeping fees on the cheque butt and on the requisition it is stated “S/S Stacey”. Ms Wright said she did not make the notation “S/S” in December 2000 because she did not know what that meant at that time. She said that sometime in January or February 2001, she wrote that notation on the cheque butt and on the requisition. It is apparent from her evidence that she did not query why the Applicant was paid on a wages requisition form rather than on an invoice requisition. 69 Ms Wright testified that on 5 January 2001 she wrote to all the staff of the Respondent advising them that they should not go and speak to the Applicant about issues involving the Respondent’s business. In the note to staff, set out in paragraph 19 of these reasons for decision, Ms Wright referred to the Applicant as not being employed full time. In relation to the words “the Bookkeeper is not employed full time with Ngaringga Ngurra” Ms Wright testified that what she meant by those words was that the Applicant was employed on a contract basis and she “loosely” used the word “employed”. 70 Ms Wright said in January 2001 there was an issue in relation to her pay. She said she was in Katherine in the Northern Territory and she wanted to purchase some goods in the Woolworths shop and she thought her wages had not gone into her account, so she rang the Applicant and asked when her wages would go through. She said the Applicant said “I know you are a very understanding person, but Daniel owed me some money and I took it out of your pay.” Ms Wright said she informed the Applicant that it was illegal to deduct money from anybody’s wages without their written authority and that she (the Applicant) replied that she did not know that. Ms Wright said the conversation became quite heated and that she told the Applicant that she would make a complaint to the police if the money was not in her account by the next morning. She said the money was deposited into her account the next morning. However, in her complaint to the Institute of Chartered Accountants, dated 23 February 2001, Ms Wright stated— “… On return from my holidays, I noticed from reading my own bank statement, a deposit of $500 in to my account from TRF Westcoast Sports. I have no idea who Westcoast Sports are but the amount of $500 is the same amount of money owed to me because of the earlier disaster with my pay. 1258 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 82 W.A.I.G. I would be pleased if you could look into this matter for me and I authorise you to correspond with Stacey on this matter for me. My concerns are: (1) The failure to process my pay and to use my pay, to pay off a private bill that belongs to my son, and (2) the unexplained deposit of $500 which equals the missing pay from 11 January. I have never authorised any such deduction from my pay.” Ms Wright said she also had another occasion on which she was not paid and she reported it to the Chairperson, who contacted the Applicant and the money was then put into her account. She said the reason that she was not paid was because she had not put in a time sheet. She said the Applicant made a rule that if no time sheet was submitted no pay would be paid but another employee at that time had not submitted a time sheet and they were paid. 71 Ms Wright said that in relation to the deduction of $500 she made a complaint to the Committee that the deduction had been unauthorised and she asked the Committee members whether she could make a complaint to the Institute of Chartered Accountants. She said they informed her that if she wanted to do that she had every right do so, but she should do it on her own behalf. Shortly thereafter both Ms Wright and the Applicant were asked to go to mediation. Ms Wright said she participated in three mediation sessions with the Applicant and Mr Miles to see whether they could settle the dispute. She said that when she informed Mr Miles that she had submitted a complaint to the Institute of Chartered Accountants he said, “Well, we may as well finish the mediation if that is the case.” Ms Wright asked for a letter of apology which the Applicant would not give, so she pursued the complaint. Ms Wright, however, conceded that there were other issues raised at the mediation other than her pay. 72 Ms Wright said that after the mediation she did not have a lot of communication with the Applicant and that she communicated requests of the Applicant through Rose or Sandra. She said she was seeking the paid invoices file. She said she wrote a memo on 14 May 2001 to the Applicant making a request for the file. On 15 May 2001 she received a response advising that she would receive the paid invoices file on Thursday yet she did not receive this file until it was returned to Ms Heritage. When Ms Wright received the paid invoices file, she said she and Ms Heritage examined the file and found a cheque which she regarded as suspicious, which was made out to a “J Fullerton”. She said she did not know what the cheque was for. She then found a cheque made out to Computer Corporation which had been generated by a cheque requisition form. She said there was no document attached to that cheque requisition. She said Ms Heritage rang the bank, had the cheque traced and ascertained that the cheque had been deposited into the Applicant’s account. She then contacted Computer Corp and ascertained that the Applicant had a computer fixed by them. Ms Wright then had a meeting with the Chairperson, Ms Butters, and others from the Department of Family and Children’s Services. At that meeting a decision was made to report the matter to the police. 73 Ms Wright maintained in her evidence that she did not say very much at the meeting, that Ms Heritage conveyed most of the information. Further she maintained that she (Ms Wright) did not go to the police station and make a complaint. When cross- examined Ms Wright vehemently denied that she had been the source of the information which led to the complaint being made to the police, or that she had, herself, reported any matters to the police. Ms Wright also maintained in her evidence that once the matter was reported to the police that the police did not report back to the Respondent about their investigation at all. In particular, they heard nothing about the police closing their investigation. 74 Ms Wright maintained in her evidence that she had no real comprehension of how salary sacrificing worked. She also said that on the odd occasions when she wrote out cheques and cheque requisitions and she would take those to Committee members for signing, she would simply present the cheque requisitions to them but did not give them any explanation prior to a Committee member signing the cheques and requisition forms. She said if they asked a question she would explain but she would not give an explanation unless it was asked for. She said she did not usually take the cheques, cheque requisition forms and invoice requisition forms to the members for signing, it was usually done by one of the Safe House workers as the Applicant would hand over the requisitions and cheque payments to a Safe House worker. 75 In June 2001 Ms Wright prepared a report to the Committee in which she stated that on— “… Thursday 28th June 2001 I will be meeting with Naomi from Kimberley Legal Service to construct an appropriate dismissal letter for Stacey Booth.” She said she did not mean the words “dismissal” to mean a dismissal, she simply meant that it was intended that a letter be prepared advising that the Applicant was suspended until the internal audit investigation was completed. On 11 July 2001 the Committee meeting minutes record that Ms Wright was to organise a letter to the Applicant as soon as possible regarding suspension due to the investigation. It is common ground that no such letter was written to the Applicant. When asked why, Ms Wright said that the advice she was given by Kimberley Legal Service was that the Applicant was engaged as contractor rather than as an employee and as there was no contract stating a period to suspend or dismiss anybody, there was no need to write a letter to the Applicant. 76 As to Ms Wright’s pay rise she received in October 2000, Ms Wright testified that in late August, early September 2000, the Applicant informed her that she (Ms Wright) was entitled to a pay rise. She said that the Applicant informed her that she was aware that Committee minutes noted that money could be used from the Safe House for a consultancy and that this money could be used to pay Ms Wright a pay increase. Ms Wright said that she requested the Applicant not to arrange a pay rise. Further, she said that at that time the Safe House Manager’s position was not filled and she was doing work at the Safe House which included her being called out at night and doing weekend work, for which she was reimbursed. She said that once Ms Heritage was appointed as Safe House Manager she did not carry out the extra work. She said she not realise that her pay had been increased because of the salary sacrificing arrangements and she did not receive payslips. She conceded, however, that she had been overpaid by an amount of about $5,700 as a result of the implementation of the pay increase. Further, it is apparent from her evidence that when the issue of the pay rise was discussed with the Applicant she did not raise the matter with the Committee. 77 Ms Wright maintained in her evidence, that at all material times the Applicant was engaged as a contract bookkeeper. Yet she conceded that the Applicant was paid wages but said that she thought that the Applicant was “slack” in not supplying an invoice. It is apparent from her evidence, however, that she never raised this with the Applicant or the committee. 78 In the police report there is a reference to a complaint being made in respect of superannuation paid on behalf of the Applicant. A cheque requisition and a cheque was raised on 7 March 2001 in the amount of $1,090.69. Under the budget line it is noted “Super Payable” and it is also noted that the payment was for “SB” meaning the payment was to be made on behalf of the Applicant. Ms Wright said that this requisition and cheque was queried at the same time as the Computer Corp cheque. In a minute of the Respondent’s Committee meeting held on 14 September 2001 it is recorded that Ms Wright advised the Committee that the superannuation cheque should be traced and perhaps the Fraud Squad needs to be involved if the Respondent suspects that something is not right. When asked about this issue she conceded that the Respondent became aware a week after the trace had been put on the cheque in June 2001 that the cheque had bounced. Ms Wright said that she understood that at the time the cheque was presented in May 2001 the Respondent was in a debit balance so the cheque was dishonoured. When asked about the Committee minutes of September 2001, as to why that cheque was raised by her, Ms Wright’s response was that she did not write the minutes. She then said that the minutes were incorrect. 82 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 1259 79 Sandra Butters testified that in 2000 she became the Chairperson of the Respondent. Prior to taking up that position she was employed as the Safe House Manager. Ms Butters said that since 17 February 2000 she has been employed as an Aboriginal Development Officer at TAFE. The position requires her to be engaged in the running of TAFE courses and also establishing TAFE courses in aboriginal communities. She has also been employed by other aboriginal corporations to carry out work such as simple bookkeeping. 80 Ms Butters testified that she was present at a meeting of the Respondent’s Committee when she was a staff member, on 19 January 2000. In minutes written by Ms Butters it is stated— “Bookkeeper and Accountant Committee also suggested that Ngaringga Ngurra find another bookkeeping service to commence doing the accounts. As Lawsons is costing too much, and they are based too far away. This needs to be done urgently. Stacey Thomas is interested, Committee needs to ring or write to her maybe requesting that she sends in a quote.” 81 Ms Butters, however, testified that she did not see a copy of any quote submitted by the Applicant but she understood that she was engaged as a contractor. Ms Butters said that the Applicant was engaged by the Committee prior to her becoming the Committee Chairperson. She conceded, however, that the Applicant was paid a wage of $600.00 per fortnight. She said that all staff were paid by wages requisition forms. She said that she did not fully understand salary sacrifice arrangements and she did not know what “S/S SB” meant. However, she was able to identify cheque requisition payments which were made out as salary sacrifice payments to third parties, as wages paid to the Applicant. Ms Butters’ signature, along with another Committee member’s is to be found on most of the cheque requisitions produced in evidence in these proceedings. Ms Butters said that she never read any of the cheque requisitions that were presented to her. She simply signed them because “we trusted Stacey”. Although Ms Butters did not address the issue directly, in evidence it is apparent that prior to the Applicant commencing her engagement with the Respondent, Ms Butters had prepared wages and cheque requisitions for both wages and invoices for the Respondent for Committee members to sign, on a number of occasions. (Exhibits 37 and 39) 82 Ms Butters said that the conflict between the Applicant and Ms Wright got to the point where neither would talk to the other. She said the Applicant would contact her or Ms Heritage to deliver materials to Ms Wright. She also said that on a couple of occasions Ms Wright had not completed her time sheet so the Applicant did not pay her. Ms Butters said that as a result of the conflict the Committee determined that both Ms Wright and the Applicant should engage in mediation and arranged for Mr Miles from the Department of Family and Children’s Services to carry out the mediation. She said that after the mediation meetings were completed both the Applicant and Ms Wright were sent an identical letter requiring that— “… The Ngarringa Ngurra Management Committee wishes to see that you work professionally, and communicate with all relevant staff directly whilst you are employed by Ngarringa Ngurra Aboriginal Corporation.” When asked what the words “employed by” meant in relation to the Applicant, Ms Butters said “employed on a contract basis at Ngaringga Ngurra”. She said that the mediation did not resolve the conflict. 83 When asked about a memorandum written by the Applicant to the Committee dated 12 January 2001, that contained a note that the Applicant was to provide the Committee with full wage details of all the Ngaringga Ngurra staff, Ms Butters said she specifically asked the Applicant for a breakdown of the wages of the staff but that did not include the Applicant, as she was on contract. She said she could only recall the Applicant attending one Committee meeting. She thought that this may have been the 13 February 2001 meeting but she could not recall whether or not the Applicant provided financial information to the Committee at that meeting. 84 Ms Butters was also asked about a Committee decision made on 15 March 2001 (Exhibit 47), to write letters to all staff regarding their positions, roles and responsibilities with the organisation, including salaries, hours and job description. Ms Butters said that the Department of Family and Children’s Services required that they have a job description for the workers. When asked why, in May 2001, an agenda for a Committee meeting (Exhibit V) showed under the heading “Staff Duty Statements/Contracts” a list of persons, including Ms Wright and the Applicant, Ms Butters said, “We wanted a job description from three of our staff, Karen, Rosie and Jennifer and the contract is Stacey’s”. 85 In relation to the computer Ms Butters said that she could recall in early 2001 that she had a conversation in the Supamart during which the Applicant mentioned to her that her computer had a cracked screen. Ms Butters, however, said there was nothing said about the Respondent paying for the cost of fixing the computer although she did recall there was a conversation in which the Applicant indicated to her that she was going to get the computer fixed. She said she recalled signing the cheque and seeing the cheque requisition for Computer Corp but there were no documents attached to the requisition. She said she recalled the cheque because it was for a large amount and she thought it was the cost for repairing one of the Respondent’s computers. 86 Ms Butters said that after the Applicant’s employment was suspended she spoke to the Applicant on a number of occasions and she recalled the Applicant came to see her at TAFE around about 29 August 2001. She agreed it was an emotional meeting and the Applicant pleaded with her to try and clear her name. She said she told the Applicant that they (the Respondent) had to wait until the investigation was over. She denied saying to the Applicant that “it’s best you do not work here anymore”. 87 Ms Butters conceded that the Toms and Whittle audit report did not make any findings that she (the Applicant) was guilty of misappropriating any funds. Further she conceded the Respondent took no steps to inform the Applicant of the content or outcome of the report. When asked whether she (Ms Butters) thought that the Applicant had done anything wrong, Ms Butters after some hesitation said that “she did not come to the committee to make a decision to pay Computer Corp … for her computer.” Legal Principles 88 It is not for the Respondent to show that the Applicant was not an employee but for the Applicant to show, on the balance of probabilities, that she was an employee (The Western Australian Builders’ Labourers, Painters and Plasterers Union of Workers v R B Exclusive Pools Pty Ltd t/as Florida Exclusive Pools (1996) 77 WAIG 4 at 8 per Fielding SC). 89 I observed in Howe v Intercorp Services Pty Ltd trading as WestVision Painting Company [2001] WAIRC 2643 at [24] and [25]; (2001) 81 WAIG 1212 at 1214 that— “The relationship of employer and employee is a contract of service where an employee contracts to provide his or her work and skill (typically to enable an employer to achieve a result). An independent contractor works in his or her own business on his or her own account. Whilst the authorities do not establish a conclusive test for determining whether a person is an employer, regard must be had to the whole of the relationship. In Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 Mason J at 24 and Wilson and Dawson JJ at 36 held that a prominent factor is the degree of control which the person (who engages the other) can exercise over the person engaged to perform work. The High Court also held that the existence of control is not the sole criteria, other relevant matters include, but are not limited to, the mode 1260 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 82 W.A.I.G. of remuneration, the provision and maintenance of equipment, the obligation to provide exclusive services, provision for holidays, deduction of income tax, delegation of work, the right to suspend or dismiss, the right to dictate the place of work and hours of work. Further, Mason J in Stevens v Brodribb Sawmilling Co Pty Ltd at 26 to 27 also observed that in some cases the organization test can be a further factor to be weighed (along with control), in deciding whether the relationship is one of employment or of independent contractor. The organization test is whether the party in question is carrying on the business, in the sense of carrying it on for himself or on his own behalf and not for a superior (Montreal v Montreal Locomotive Works [1947] 1 DLR 161 per Lord Wright at 169). Whilst regard can be had to whether the parties regarded their contractual relationship one of employee/employer or independent contractor, if the evidence shows otherwise the parties cannot alter the truth of that relationship by putting another label on it (Massey v Crown Life Insurance Co (1978) 1 WLR 676 and Narich Pty Ltd v Commissioner of Pay- Roll Tax (1983) 2 NSWLR 601).” 90 The distinction between an employee and an independent contractor is “rooted fundamentally in the difference between a person who serves his employer in his, the employer’s, business, and a person who carries on a trade or business of his own” (Marshall v Whittaker’s Building Supply Co (1963) 109 CLR 210 per Windeyer J at 217; see also Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313 per McHugh J at 366; approved by Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ in Hollis v Vabu Pty Ltd [2001] HCA 44 at [40]; (2001) 181 ALR 263 at 275). 91 The notion of “control” and its adjustment to the circumstances of contemporary life was recently re-considered by the majority of High Court in Hollis v Vabu Pty Ltd [2001] HCA 44 at [43-44]; (2001) 181 ALR 263 at 276; where Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ observed— “… In Humberstone [62], Dixon J observed that the regulation of industrial conditions and other statutes had made more difficult of application the classic test, whether the contract placed the supposed employee subject to the command of the employer. Moreover, as has been pointed out [63]— ‘The control test was the product of a predominantly agricultural society. It was first devised in an age untroubled by the complexities of a modern industrial society placing its accent on the division of functions and extreme specialisation. At the time when the courts first formulated the distinction between employees and independent contractors by reference to the test of control, an employer could be expected to know as much about the job as his employee. Moreover, the employer would usually work with the employee and the test of control and supervision was then a real one to distinguish between the employee and the independent contractor. With the invention and growth of the limited liability company and the great advances of science and technology, the conditions which gave rise to the control test largely disappeared. Moreover, with the advent into industry of professional men and other occupations performing services which by their nature could not be subject to supervision, the distinction between employees and independent contractors often seemed a vague one.’ It was against that background that in Brodribb [64] Mason J said that, whilst these criticisms might readily be acknowledged— ‘the common law has been sufficiently flexible to adapt to changing social conditions by shifting the emphasis in the control test from the actual exercise of control to the right to exercise it, ‘so far as there is scope for it’, even if it be ‘only in incidental or collateral matters’: Zuijs v Wirth Brothers Pty Ltd [65]. Furthermore, control is not now regarded as the only relevant factor. Rather it is the totality of the relationship between the parties which must be considered.’ “ Relevant Matters Control 92 Whilst the Respondent did not exercise control over how the Applicant carried out bookkeeping and accounting functions, the Respondent did retain the right of control. For example Ms Butters gave instructions to the Applicant that she was required to attend mediation. Obligation to work and Mode of Remuneration 93 The Applicant could determine when she carried out her work, however, she was required to work 4 to 5 hours per week for $300 per week. The Applicant was free to carry out bookkeeping or accounting work for other aboriginal organisations. She did not fill out any timesheets. The Applicant was paid the same amount each week. When she worked overtime she was paid extra. She did not pay income tax except on amounts paid as overtime. The $300 per week was paid as a benefit under a salary sacrifice arrangement. The ATO, in paragraph 28 of its draft ruling TR 2001/D5 states that an effective salary sacrifice arrangement is one where— “Benefits provided to or on behalf of employees under effective SSAs may be derived as ordinary or statutory income by the employees. Any such benefits that are convertible to money are derived by the employees as ordinary or statutory income. However, these benefits are not assessable income of the employees … “ 94 Further, under paragraph 18 the ATO states— “Under the A New Tax System (Fringe Benefits) Act 2000, from the 2000-01 FBT year, the concessional treatment given to benefits provided to an employee of a public hospital, a non-profit hospital or a non-government public hospital is limited to $17,000 of the total grossed up value per employee. Any benefit provided above this limit will be subject to normal FBT treatment. Under that same Act, from the 2001-02 FBT year, the concessional treatment given to benefits provided to an employee of a public benevolent institutions (other than a hospital) or an FBT rebatable organisation will be limited to $30,000 of total grossed-up value per employee.” 95 It is common ground that the salary sacrifice arrangement can only be entered into by employees. The Applicant was paid each week by the creation by her or by Ms Wright of a wages requisition. The bookkeeping and accounting work was required to be carried out personally. If the Applicant was away from Halls Creek for any periods of time, she arranged for the weekly wages to be prepared by her before she went on leave or for Ms Wright to do them. Provision and Maintenance of Equipment 96 The Applicant worked from her home office, used her own laptop computer, telephone and other incidental items. She used the Respondent’s letterhead if she sent any correspondence on behalf of the Respondent. It is not in dispute that Ms Wright, on behalf of the Respondent, agreed to pay her disbursements. However, the amount is in dispute. Intention of the Parties 97 For the reasons set out below, I do not accept Ms Wright’s and Ms Butters’ evidence that the Respondent engaged the Applicant as a contractor. Both Ms Wright and Ms Butters in correspondence to the Applicant referred to her as an employee. All staff were sent a letter about their positions, roles and responsibilities following a Committee meeting in March 2001. The Applicant gave uncontradicted evidence she received a letter from the Respondent about the preparation of a job description for her position. 82 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 1261 The Organisation Test 98 The Applicant provided her own equipment and place of work yet she did not carry on an accounting business of her own. Although when she carried out short term bookkeeping/accounting work for other organisations she did so as a contractor and rendered an invoice for payment in the name of S Booth. Exhibit 26 shows that between 14 February 2001 and 4 March 2001 she carried out 23.08 hours of administrative support for the Ngoonjuwah Aboriginal Corporation. She provided them with an invoice for the work at the rate of $35.00 per hour (Exhibit 26). Conclusion – Nature of Engagement 99 Whilst some of the facts could be said to point to a contractual relationship, such as the fact that the Applicant was not required to complete a leave application or fill in a time sheet, when all the incidents of engagement are considered, I am satisfied that at all material times the Applicant was a part time employee, working under a contract of service. The reason I have reached this view is that the Respondent not only retained the right of control, it exercised that right. Whilst the Applicant did take on other work as a contractor, the Applicant was only engaged to work for the Respondent for 4 to 5 hours per week. Further, I am satisfied that she worked as an integral part of the Respondent’s business. She had no ability to delegate her work other than to other employees of the Respondent and it is clear that whilst working for the Respondent she was not carrying on that work for herself but for the Respondent. Credit 100 Having heard all of the evidence, in general I prefer the evidence given by the Applicant to the evidence given by Ms Wright and Ms Butters. The Applicant gave consistent evidence and was not shaken in cross-examination. I did not find Ms Wright to be a credible witness. If I were to accept her evidence I would conclude that she is not competent to run the Respondent’s business. Her explanation as to her use of imprecise language in documents that indicated the Applicant was an employee did not make sense. Further, I do not accept her evidence that she knew “nothing about salary sacrifice” in May 2000 and that she did not know what “S/S S/B” meant until February 2001. Ms Wright conceded that in late 1999 the Respondent had received a report from Lawson’s Commercial Services that addressed fringe benefits tax and salary sacrifice arrangements. She said she did not understand the report and she gave the report to the Executive Committee. The preparation of the report cost the Respondent $3,200. She also said that she contacted Lawson’s Commercial Services and advised them that she did not understand the report, yet she contends she sought no explanation from the author of the report. In addition, she prepared the wages, in particular the Applicant’s salary sacrifice payments on a number of occasions prior to February 2001. As to payment of wages and debts, Ms Wright said that the only time she presented cheques and requisitions to Committee members was when she prepared the cheques herself, and that she did so without explanation. It seems clear that she only did so when the Applicant was absent. She said it was only her duty to explain the cheques when a query was raised by a Committee member. Curiously, when the Applicant prepared the cheques and cheque requisitions Ms Wright said she did not take them to the Committee members as she was “too busy”. 101 Ms Butters was hesitant and gave some of her evidence reluctantly. I also found Ms Butters’ evidence about her use of words in documents indicating the Applicant was an employee to be contrived. Conclusion – Was the Applicant Unfairly Dismissed? 102 For the reasons set out above where the evidence departs I prefer the Applicant’s evidence to the evidence given by Ms Wright and Ms Butters. Consequently, I accept the evidence given by the Applicant that on 29 August 2001 Ms Butters informed her that it was best that the Applicant not work for the Respondent anymore because one of the managers does not get on with you. The Respondent concedes that if this evidence is accepted then it is open for the Commission to find that the Applicant was dismissed by the Respondent on 29 August 2001. Accordingly, I make that finding. It is apparent from the evidence that the “manager” is Ms Wright and that prior to the Computer Corp incident the Respondent’s Committee had been unsatisfied with the conduct of both Ms Wright and the Applicant. 103 It is also conceded on behalf of the Respondent that the Respondent did not accord the Applicant procedural fairness prior to Ms Butters informing the Applicant that she was dismissed. It is clear that the Applicant was summarily dismissed. 104 Where an employee is dismissed summarily the onus is on the Applicant to demonstrate the dismissal was not fair on the balance of probabilities. However, there is an evidential onus upon the employer to prove that the summary dismissal is justified (Newmont Australia Ltd v The Australian Workers’ Union, West Australian Branch, Industrial Union of Workers (1988) 68 WAIG 677 at 679). 105 The requirements of procedural fairness in respect of an investigation into alleged misconduct were considered by the Full Bench of the South Australian Industrial Relations Commission in Bi-Lo Pty Ltd v Hooper (1992) 53 IR 224. In the Bi-Lo case the Full Bench of the South Australian Commission observed at 229— “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.” (see also Western Mining Corporation Limited v The Australian Workers’ Union, West Australian Branch, Industrial Union of Workers (1997) 77 WAIG 1079 at 1084 per Sharkey P and Coleman C.C.) 106 Despite the requirement to accord procedural fairness, not every denial of procedural fairness will entitle an employee to a remedy. No injustice will result if after a review of all the circumstances of the termination it can be said that the employee could be justifiably dismissed (Shire of Esperance v Mouritz (1990) 71 WAIG 891; Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 430 per Brennan CJ, Dawson and Toohey JJ, and at 466 per McHugh and Gummow JJ). 107 The Respondent says that the Applicant’s conduct in relation to the Computer Corp payment was unacceptable in that the way in which the Applicant went about seeking payment for and paying for the repairs to her computer constituted a valid reason for termination. Firstly it is contended that she completed a cheque requisition on the basis of a quote rather than a debt. Secondly, she did not attach a copy of the quote or any other document to the cheque requisition. Thirdly, the Respondent says the Applicant’s explanation as to why she deposited the cheque made out to Computer Corp into her account is unsatisfactory. As to the failure to attach a copy of the quote to the cheque requisition the Respondent contends that the failure to do so led Ms Butters to think that the cheque was for repairs and maintenance to the Respondent’s computers. The Respondent says that if it had sought an explanation from the Applicant concerning the Computer Corp payment and received the explanation that the Applicant presented in her evidence the result would have been the same, in that the Respondent 1262 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 82 W.A.I.G. would have dismissed the Applicant. Mr Robertson, on behalf of the Respondent, says that two weeks’ compensation would be sufficient to remedy the failure to accord the Applicant procedural fairness. I understand that submission to be a submission that two weeks would have been a sufficient period of time to enable the Applicant to put her case and for the Respondent to consider her explanation and make its decision. 108 Whilst I accept the Applicant’s evidence in respect of her version of the conversation she had with Ms Butters in the Supamart about her laptop computer, and that she did attach a copy of the Computer Corp internal job card containing the quote to the cheque requisition, I am of the view that such a casual conversation was not sufficient to authorize payment of the Computer Corp account. There was no discussion about the estimate of costs of repairs. Clearly, the cost was not insubstantial. I would have expected that a prudent bookkeeper, who is a Chartered Accountant and who works for a non- profit charitable organisation, would have taken steps to formalize the agreement. Further, that the Applicant should have written a memorandum to the Committee setting out the basis of the claim, the terms of the quote and confirming that Ms Butters had indicated that payment “shouldn’t be a problem”. Although I accept that the job card was attached to the cheque requisition form, other than a reference to “Stacey Booth” as the client contact, there is nothing on the job card which states the name of the client. There was, however, a description of the computer and fault description stating that the “display screen was cracked”. 109 Whether the job card became detached from the cheque after the Applicant prepared the cheque requisition is not known. The cheque requisition, a copy of the cheque and the job card were tendered into evidence by the Respondent’s agent without explanation as to when the job card came to be in the possession of the Respondent. Mr Toms and Ms Whittle in their audit report, at page 9, say they investigated a number of payments that were unsupported by invoices or receipts. One was the payment to Computer Corp. The auditors then state— “Upon further investigation Audit sighted an Internal Job Card and Customer Technical Report from Computer Corporation that indicated that work was undertaken to repair a damaged computer screen for the former Accountant, with the job being entered on the 23 March 2001 and completed on 21 May 2001. An invoice from Computer Corporation to the former Accountant dated 22 May 2001 for $1,386.45 was sighted as well as a receipt for payment by credit card on 22 May 2001. A cheque for the balance from the original amount ($2,558.40) to what was actually invoiced ($1,386.45) for $1,175.95 was sighted as being paid to the organisation by the former Accountant on 5 June 2001. Recommendation All expenditure should be supported by an invoice or a receipt of payment.” At pages 10 and 11 of their report they refer to three payments being made where it was uncertain whether funds had been used appropriately. None of the three payments referred to the payment made to Computer Corp. 110 I do not accept that the Respondent acted fairly in making a complaint to the police. It is apparent from the Offence Report and Running Sheet that one of the matters was clearly a false allegation that the Applicant had ignored several requests to hand over documents and that she had paid bills to avoid tax. The Applicant handed over the paid invoices file, which led to Ms Wright reviewing the Computer Corp files. Further, I am not satisfied there is anything illegal about the Applicant salary sacrificing her salary. Plainly the way in which information was conveyed to the police was mischievous and led to the execution of a search warrant on her family business and home at a time when her family business was open to the public. 111 Although the delay in arranging an internal audit was in the circumstances unacceptable there is no evidence that the delay was caused by the Respondent. 112 Given that the auditors, Mr Toms and Ms Whittle, did not make a finding that payment to Computer Corp was an inappropriate payment, it is my view that the Respondent in exercising its legal right to dismiss in all the circumstances was harsh, unfair and oppressive so as to amount to an abuse of that right. In my view the failure of the Applicant to seek formal approval by the Committee did not warrant summary dismissal, although the circumstances may have justified other disciplinary action, such as a reprimand with a warning that dismissal would follow for any repeated breach of accountable procedures. Remedy – Unfair Dismissal 113 I am satisfied that re-instatement is impractical as the relationship between the parties has broke down. 114 The duty to mitigate loss in claims of unfair dismissal lies on the claimant employee. This duty requires the Applicant to diligently seek alternative employment (see Growers Market Butchers v Backman (1999) 79 WAIG 1313 at 1316 and cases cited therein). It is contended on her behalf that the Applicant was unable to mitigate her loss because of the rumours caused by her dismissal. However, no evidence was given by the Applicant as to whether she had made any attempts to seek alternative employment. 115 Accordingly, I have reached the view that the Applicant has failed to mitigate her loss. I am, however, satisfied that the Applicant has made out a case that she has suffered an injury within the meaning of s.23A(1)(ba) of the Act. The Respondent’s course of conduct in relation to the execution of the search warrant and the subsequent lengthy suspension without pay was extremely callous, oppressive and humiliating, culminating in a dismissal. Given that the Applicant works and resides in a small town, I accept the contention made on her behalf that she suffered significant trauma as a result of the Respondent’s conduct. In the absence of medical evidence I am not satisfied that the stress suffered by the Applicant caused her to miscarry her child. I will make an award of compensation of $9,000 for injury. Contractual Benefits 116 In an application pursuant to s.29(1)(b)(ii) of the Act, the onus is on the Applicant to establish that the subject of the claim is a benefit to which the Applicant was entitled under her contract of her employment. In that regard, it is for the Commission to determine the terms of the contract of employment and to ascertain in a juridical manner, whether the claim constitutes a benefit which has been denied under the contract of employment, having regard to the obligations on the Commission to act accordingly to equity, good conscience and the substantial merits of the case, pursuant to s.26 of the Act (Belo Fisheries v Froggett (1983) 63 WAIG 2394; Waroona Contracting v Usher (1984) 64 WAIG 1500; Perth Finishing College v Watts (1989) 69 WAIG 2307). 117 Unless authorised by contract, award or statute the employers may not suspend an employee without pay. The learned authors of Macken, McCarry and Sappideen in their 4th edition of The Law of Employment at page 154 state— “An employer has no common law right to suspend an employee without pay for misconduct even if that misconduct would justify immediate dismissal. Such a right may, however, be granted by contract, statute or award”. However, suspension of an employee with pay is lawful pending the outcome of a disciplinary investigation (see Cooke v The Royal Melbourne Hospital unreported IRCA No. VI 2189 of 1995). 82 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 1263 118 I am satisfied that the Applicant has made out a claim that she is owed wages from 28 May 2001 to 29 August 2001. I am not of the view that the agreed rate of $300.00 per week should be grossed up. Leaving aside the claim for disbursements the Applicant’s contract entitled her to payment of $300.00 per week and no more. Whilst in the Federal Court awards for damages for loss of taxable income awards are grossed up to compensate for tax, grossing up is applied where tax was required to be paid in any event. At no time was the Respondent required to pay the Applicant more than $300.00 per week. Accordingly, I will make an order that the Respondent pay the Applicant 13 weeks and three days pay at $300.00 per week being an amount of $4,080.00. 119 As to the Applicant’s claim for disbursements, as she did not carry out any work for the Respondent after 1 June 2001 I am not satisfied that disbursements were payable beyond that date. For the reasons set out above I accept the Applicant’s evidence that it was a condition of her contract of employment that she be paid $15.00 per fortnight for disbursements. I will allow her claim from 1 April 2001 until 1 June 2001. Accordingly she is owed nine weeks’ disbursements at the rate of $15.00 per fortnight, being $67.50. 120 In relation to the Applicant’s claims for accrued annual leave there is no evidence that there was a contractual agreement between the parties that the Applicant was to be allowed annual leave or monies in lieu thereof. Accordingly, this claim will not be allowed. 121 As to the claim for superannuation sought as payable under the Superannuation Acts, this claim will not be allowed as the obligation to pay is a statutory one and may not be recovered as a contractual benefit (see Dellys v Elderslie Finance Corporation Limited [2001] WAIRC 04455 [57] – [67]; (2002) 82 WAIG 23 at 29 and the cases cited therein). Applicant’s Application for Costs 122 The Applicant makes an application for reimbursement of its expenses. The test to be applied in awarding of costs under s.27(1)(c) of the Act is set out in Brailey v Mendex Pty Ltd t/a Mair & Co Maylands (1992) 73 WAIG 26 in which the Full Bench held at 27— “The application, too, must be determined under s.26 of the Act. However, part of that equity and good conscience includes what is settled law in industrial matters that costs ought not be awarded, except in extreme cases, (eg) where proceedings have been instituted without reasonable cause (see Hospital and Benevolent Homes Award (1983) AILR 409 where costs were awarded in a matter where the applicant terminated the proceedings after putting the respondent to the expense of defending without obtaining an order).” 123 This case does not fall within this category. Accordingly I will not make an order for costs. _________ 2002 WAIRC 05889