Australian Rail, Tram & Bus Industry Union v KDR Victoria Pty Ltd Trading as Yarra Trams

JESSUP J 2 This is an appeal from an order made by a single Judge of the court on 8 May 2013, wherein a proceeding commenced by the appellants, the Australian Rail, Tram and Bus Industry Union ("the Union") and Stevan Uzelac, against the respondent, KDR Victoria Pty Ltd, trading as Yarra Trams, was dismissed. In that proceeding, the appellants sought the imposition of penalties under s 546 of the Fair Work Act 2009 (Cth) ("the FW Act") in respect of an alleged contravention of s 50 of that Act constituted by a contravention of cl 23 of the Yarra Trams Enterprise Bargaining Agreement 2009 ("the enterprise agreement"), an enterprise agreement within the meaning of s 50. At the time of the proceeding before the primary Judge, a Statement of Claim, but not yet a Defence, had been served. 3 The nature of the matter which came before the primary Judge was governed by a consent order made by Middleton J on 22 November 2012: 1. Pursuant to Rule 30.01 the Court determine that the following question arising in the proceeding be heard separately from any other question: Does clause 23 of the Yarra Trams Bargaining Agreement 2009 require Yarra Trams to conduct an inquiry constituted by: i. A hearing conducted by persons independent of the Chief Executive Officer of Yarra Trams; and/or ii. A hearing conducted by persons not employed by Yarra Trams, where an employee of Yarra Trams who is dismissed from the service of Yarra Trams requests such an inquiry in writing to the Chief Executive Officer of Yarra Trams within 48 hours of such dismissal? In his reasons for judgment published on 12 April 2013, the primary Judge answered that question ("the separate question") in the negative on both of its aspects. Although, consistently with what the appellants had requested in the event of such an answer, his Honour gave them leave to discontinue the proceeding, the order of 8 May 2013 to which I have referred finally disposed of the proceeding adversely to the appellants, and gave them an appeal as of right. 4 Although the separate question has the appearance of one which should have been answerable by reference to the terms of the enterprise agreement only, in fact the appellants' constructional case depended to a large extent on evidence of custom and practice which lay outside, but was said to inform the meaning of, that agreement. Indeed, it would appear that that case assumed the existence of most of the facts alleged in the appellants' Statement of Claim, notwithstanding that the respondent's position with respect to those allegations had not been the subject of the appropriate pleading. It seems, from a reading of the primary Judge's reasons of 12 April 2013, that his Honour was prepared to make the assumption which the appellants' case involved, yet, as mentioned, he answered the separate question adversely to them. 5 Pursuant to s 54 of the FW Act, the enterprise agreement operated from 24 November 2009. Part One thereof set out what were described as "common conditions", and included cl 23, headed "Disciplinary Counselling", in the following terms: Staff discipline will continue to be conducted in accordance with the Yarra Trams Disciplinary Counselling Policy and Procedures, as contained in MSM document c400im0001. During the life of the Agreement the parties undertake to give further consideration to implementation of the Discipline Panel for all areas of Technical Services. The only exception to the above procedure is for Tram Drivers and Customer Service Staff where, their immediate supervisor will refer all matters requiring formal disciplinary action to their immediate manager for further action. This however in no way restricts the rights of staff performing a staff supervisory role to conduct informal performance counselling discussions with their subordinate staff as may be required from time to time. This exceptions arrangement for Tram Drivers and Customer Service Staff in no way restricts or limits the immediate supervisors right to interview employees or to conduct investigations into all matters relevant to their subordinate staff's work performance. Front line supervisors will also perform the following actions at the direction of their Manager: • suspend employees • issue call-in notices • issue letter of release • issue As Instructed notifications 6 The "Yarra Trams Disciplinary Policy and Procedures", ("the disciplinary policy") referred to in cl 23, was in evidence before the primary Judge. Clause 4 thereof, headed "Conditions", read as follows: 4.1 Suspension With Pay Where it is desirable to exclude an employee from the workplace until the matter under investigation is resolved, the employee may be suspended with pay. (Refer to o400fo243 Employee Suspension Notice). 4.2 Alternatives to Termination of Employment Transfer to other duties and/or reduction in grade may be considered in some cases as an alternative to dismissal. 4.3 Termination of Employment Termination of employment should only be considered after consideration of all factors. The following factors are particularly important. (a) The reason for termination. (b) The employees employment history and record. (c) Whether the reason for dismissal is based on fact and is supported by an adequate written warning, (except in cases of summary dismissal). (d) Whether the employee has had adequate opportunity to respond to the allegations and the response does not alter the circumstances or the reasons for the proposed termination. (e) Having regard to the seriousness of the circumstances, whether there is an alternative to termination such as transfer to other duties or reduction in grade. 4.4 Summary Dismissal Yarra Trams has a legal right to summarily dismiss an employee without notice for serious misconduct. Where an employee is guilty of serious misconduct warranting summary dismissal warnings are obviously not relevant. However the procedure leading to the dismissal must be fair and just. A prompt investigation of all the circumstances is essential. The employee must be given every opportunity to respond to the allegations. 4.5 Major Traffic Accidents Major accidents (those where loss of life has occurred or serious injury to persons or property) will be investigated in accordance with Yarra Trams' established processes which are set out in 'Section 10 Accident Investigation Procedures'. In the event that arising from such an investigation consideration is to be given to discipline action against an employee, the procedures set out in this document will be followed. 4.6 Appeals An employee who has been dismissed from the service of Yarra Trams or reduced in grade shall be entitled to an inquiry if within 48 hours of such dismissal or reduction he/she so requests in writing to the Chief Executive. The employee shall be entitled to be represented at an inquiry by a member of a union or employee association or other nominated representative. These provisions shall not abrogate any rights of appeal under the Workplace Relations Act on behalf of an employee who considers he/she has been unfairly dismissed. 7 The appellants' case before the primary Judge, repeated on appeal, proceeded in two stages: first, that cl 23 of the enterprise agreement required the implementation of the disciplinary policy in the area of staff discipline; and secondly, that custom and practice with respect to inquiries held under cl 4.6 of the disciplinary policy, or corresponding earlier provisions, was such as to make it mandatory for such an inquiry to be conducted by someone who was independent of the chief executive officer of, and not employed by, the respondent. His Honour rejected that case at both of these stages. 8 With respect to the first stage, the primary Judge held that the opening paragraph of cl 23 did not impose any obligation on the respondent, either to conduct an inquiry in a particular case or in other respects. It was the disciplinary policy which imposed the relevant obligation to conduct an inquiry, but that policy, his Honour held, "forms no part of the enterprise agreement and cannot be enforced as though it were part of the enterprise agreement" (see para [19]). While acknowledging the evidence that, on many occasions over the previous decade, the respondent's predecessors in business had "convened panels consisting of an independent chairperson to hear "inquiries" from decisions by management to discipline employees" (see para [21]), his Honour noted that there was not, in fact, a relevant history of provisions such as cl 23. Indeed, according to evidence which his Honour accepted, one of those predecessors specifically refused to consider incorporating the then relevant disciplinary document into the agreement then being negotiated with the Union. There was, in the circumstances, no "common understanding" as between the parties to the enterprise agreement that the disciplinary policy would be so incorporated. 9 I agree with the primary Judge that custom and practice with respect to the constitution of the inquiring authorities in disciplinary matters was not sufficient to impress upon cl 23 a meaning which did not, at least as a reasonably clear available interpretation, appear from the words of the clause itself. But it is unnecessary to rely on custom and practice to perceive that the clause required, in terms, that staff discipline be conducted in accordance with a clearly identified document, the disciplinary policy. Subject to any want of clarity in the content of the disciplinary policy itself, if a member of staff were disciplined otherwise than in accordance with that policy, there would seem to have been a contravention of cl 23. Thus I cannot agree with the primary Judge that cl 23 imposed no obligation on the respondent, that is to say, on the employer whose function it was to discipline staff members in appropriate cases. I would, therefore, accept so much of the appellants' case on appeal as involves what I have described as the first stage. 10 With respect to the second stage of that case, the primary Judge held that, on the plain words of cl 4.6 of the disciplinary policy, there was no requirement that the inquiry referred to be conducted by someone who was independent of the chief executive officer of, and not employed by, the respondent. His Honour referred to other provisions in the policy which dealt in great procedural detail with analogous subjects, most obviously that of the course which was required to be followed before the disciplinary action of dismissal was taken in respect of a particular employee, and contrasted that with the "lack of strictures on the form of the inquiry" (see para [31]) under cl 4.6. With respect to past practice, his Honour said: 34. Predecessors of Yarra Trams, including companies other than the respondent which have traded as Yarra Trams, appear to have organised panels chaired by independent chairpersons to review dismissal decisions by way of oral hearing. In that regard, the discussion at [20]-[22] above, is equally applicable to this issue. However, there is nothing, on a plain reading of the disciplinary document, to support the view that the document prescribes the conduct of an inquiry. The only certainty it provides is that there will be an inquiry and that the dismissed employee may be represented at the inquiry. 11 I agree with the primary Judge that there is nothing in the policy itself that would require the inquiry under cl 4.6 to be conducted by someone who was independent of the respondent and its chief executive officer. There are, moreover, two internal constructional considerations that would tend against the implication of such a requirement. First, the request for an inquiry is to be made to the chief executive himself or herself. If anything, this implies that it is to be the chief executive's inquiry, hardly a surprising idea since, presumably, he or she would be the highest authority in the corporate organisation in the name of which the dismissal occurred. Secondly, to the extent that independence from the respondent itself might be thought desirable, at least as an option for the dismissed employee, the second paragraph of the sub-clause recognises the existence of a right to appeal to the relevant statutory authority. 12 As mentioned, the thrust of the appellants' case was on the custom and practice followed by the respondent's predecessors, which were said to have involved - and which his Honour appears to have accepted involved - recourse to a person independent of the chief executive officer for the purpose of conducting an inquiry of the kind required by cl 4.6 of the disciplinary policy. At this point I agree entirely with the primary Judge that there is nothing in cl 4.6 which would require such a procedure, and no such ambiguity as might legitimately be resolved by reference to custom and practice. 13 We were referred to a number of authorities on the question of the extent to which resort might be had to past practice as between the parties to an agreement as an aid to resolving some ambiguity in the construction of a particular provision to which they had agreed. I do, however, regard the present as an inappropriate occasion to explore the limits of this area of jurisprudence. In the first place, as I have said, there is no ambiguity in cl 4.6. In the second place, and more fundamentally, the disciplinary policy is not an agreement between the Union and the respondent. Indeed, it is not a consensual document at all. It is the respondent's policy, and the whole question of what the Union might have assumed was the meaning conveyed by, or the detailed requirements of, cl 4.6 simply does not arise. Whatever might have been the practice followed by the respondent's predecessors, or even by the respondent itself, there was and is nothing in the disciplinary policy which would preclude the respondent from undertaking an inquiry in a way that did not conform to that practice. 14 I would, therefore, reject so much of the appellants' case on appeal as involves the second stage. It follows that I would dismiss the appeal. 15 In the light of the amendment made by Item 1 of Schedule 10 to the Fair Work Amendment Act 2012 (Cth), it was accepted by the parties that there could be no order as to costs in this proceeding. I certify that the preceding fourteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup.