Australian Workers Union v. Australian Steel Mill Services Pty [2009] NSWIRComm 1035

LEGISLATION CITED: Industrial Relations Act 1996 Federal Workplace Relations Amendment (Work Choices) Act 2005

Pacific Power v. Nieass (1995) 81 IR 46 Pastrycooks Employees, Biscuit Makers Employees and Flour and Sugar Goods Workers Union v. Gartrell White (No.3) (1990) 35 IR 70 CASES CITED: Roads and Traffic Authority Disputes Case - unreported State of New South Wales v. Commonwealth of Australia (2006) 156 IR 1 Tooths Dispute Case (1972) AR 130

HEARING DATES: 16/06/2009, 19/06/2009, 30/06/2009;

APPLICANT Wayne Phillips Australian Workers Union LEGAL REPRESENTATIVES:

RESPONDENT Jack Henington Australian Steel Mill Services Pty

DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

Australian Workers Union and Australian Steel Mill Services Pty

Notification of an industrial dispute by the Australian Workers Union under S.130 of the Industrial Relations Act, 1996 re suspension and warning to employees

Referral of a matter under S.146A of the Industrial Relations Act, 1996 by the Australian Workers Union and Australian Steel Mill Services Pty

1 In late 2008 Australian Steel Mill Services Pty installed new timekeeping machines for its operations in the Port Kembla steelworks. One such machine was installed outside the employees' crib room for its workshop employees. When employees clock on at the commencement of their shift and clock off at the end of their shift they present a red personal key tag at the machine and a message is recorded on the equipment - "welcome" when clocking on and "goodbye" when clocking off. More importantly, a picture is taken of the employee as he uses the equipment and the name of the employee bundying on or off appears on a screen on the machine. The monitor for the camera on the top of the bundy clock was clearly visible to the employees as they use the timekeeping equipment. It was not intended by ASMS management as a surveillance camera and only has a relatively short range. Nor is it used to calculate wages and entitlements to overtime. That is done through time sheets prepared by the employees. Its purpose is to provide a check that any employee is not using the key tags of another employee to clock on or off.

2 On Friday, 17 October, 2009 ASMS wrote to its employees in the following terms:

"....As you may already be aware, the company will soon be installing a time and attendance system, more commonly known as 'bundy clocks' at your designated work area on site. The reason for installing this system is to reconcile when employees are present on site with the times recorded on time sheets. This will assist both employees and the company to eliminate any disputes associated with timekeeping.

This system does not replace the requirement for employees to accurately complete and code time sheets. It remains your obligation to submit time sheets in order to be paid. The installation will be completed during this month. You will soon be provided with a unique key tag and operating instructions..."

3 A dispute has now arisen between ASMS and the AWU over this equipment and the AWU has lodged a notification of that industrial dispute pursuant to the provisions of S.130 of the 1996 Industrial Relations Act. The S.130 notification records the issue in dispute as follows:

"....Two workshop employees unfairly suspended on Tuesday, 27 January, 2009..."

The two employees concerned are Mr Robert Brown and Mr George Juhasz, who are engaged as plant mechanics in the ASMS workshop in the Port Kembla steelworks. The allegation against them by ASMS management is their incorrect use of the new automatic timekeeping equipment on Sunday, 18 January, 2009. Mr Brown and Mr Juhasz clocked off at the bundy clock at the end of their shift on Sunday, 18 January, 2009 but the timekeeping equipment recorded Mr Brown's face on the photograph taken when Mr Juhasz bundied off and subsequently Mr Juhasz's face against Mr Brown's key.

4 Mr Juhasz attended an interview with ASMS management over the incident on Friday, 30 January, 2009. Mr Brown did not attend a meeting with ASMS management until Wednesday, 4 February, 2009 as he was absent from work due to a back injury at that time. Both employees had been suspended without pay on Wednesday, 28 January, 2009 pending further investigation of the matter. A suspension of one day for both employees was subsequently confirmed and they received a final written warning placed on their personnel files in comparable terms, viz:

"....This letter serves as an official final written warning in respect of your unacceptable behaviour regarding incorrect use of an ASMS timekeeping device. Your explanations in response to these allegations at the disciplinary interview have been considered as unsatisfactory. The company expects there will be no further instances of this behaviour by you. Further instances may lead to termination of your employment.

This record will be current on your personal file for a period of six months and will be reviewed on Wednesday, 5 August, 2009. During this six month period, this warning will be taken into account if any further breaches of behaviour or misconduct justifying a warning or dismissal occur..."

Neither Mr Brown nor Mr Juhasz were prepared to sign the memorandum in the space provided on it.

5 The S.130 notification by the AWU over this incident came before me for a conference on Tuesday, 3 February, 2009 and again on Monday, 16 February, 2009. Conciliation failed to settle the matter. I issued the certificate of attempted conciliation required by S.135 and lodged it in the prescribed manner, programming the matter for hearing on Tuesday, 16 June, 2009, Friday, 19 June, 2009 and Tuesday, 30 June, 2009. All proceedings were convened in the Commission's premises at 90 Crown Street, Wollongong. Mr Phillips represented the AWU in the proceedings, calling Mr Brown and Mr Juhasz to give evidence. Mr Henington represented ASMS in the hearing. He called three members of ASMS management as witnesses in the proceedings: Mr Jason Snell, a workshop supervisor, Mr Lenard Bain, a workshop manager, and Mr Jeremy Knight, the manager of processing and road services. 6 ASMS is, of course, a trading corporation within the meaning of S.51(xx) of the Commonwealth Constitution and since the enactment of the 2005 Federal Workplace Relations (Work Choices) Act, certain restrictions have been imposed on the State Commission dealing with industrial disputes involving any trading corporations within the meaning of S.51(xx) of the Constitution [State of New South Wales v. Commonwealth of Australia (2006) 156 IR 1]. However, the AWU and ASMS have entered into a referral agreement under S.146A of the State IR Act, bringing the current S.130 notification effectively before the State Commission for conciliation and/or arbitration.

7 According to Mr Brown and Mr Juhasz, at the end of their shift on Sunday, 18 January, 2009 [18.02] Mr Brown was standing in front of the clock card machine ready to clock off when Mr Juhasz arrived and, saying he was in a hurry, reached across and presented his tag at the machine, bundying himself off. Mr Juhasz claimed in his evidence that he thought that Mr Brown would move out of the way for him but Mr Brown refused to do so, saying:

Mr Juhasz walked away and Mr Brown yelled after him:

The machine does not show a photograph to the employee using it to clock on or off but it does show the actual name of the person whose key is shown, together with the word "welcome" or "goodbye". Mr Brown therefore would have known that the machine would have shown his photograph against Mr Juhasz's tag.

8 Mr Juhasz returned to the bundy clock and, according to him, "...debated the issue..." with Mr Brown. Mr Juhasz also has indicated that he and Mr Brown "jostled" one another. Mr Brown said:

"Look what you've done." According to Mr Brown in his written statement, Mr Juhasz:

"...barged in to have a look at his name on the clock card machine but by then I had already swiped my card and the machine took his photo..."

9 On Monday, 19 January, 2009 Mr Knight conducted a random audit of the attendance records for Sunday, 18 January, 2009 and, in the process, he discovered that whilst Mr Juhasz was recorded as clocking off at 6.02pm, it was Mr Brown's face that appeared on the corresponding photograph. Mr Knight had serious concerns that Mr Brown had clocked off Mr Juhasz. Mr Henington expressed similar views in the compulsory conference proceedings before me on Tuesday, 3 February, 2009 arising out of the S.130 notification by the AWU, viz:

".... Prima facie , there was a case to be answered that Mr Juhasz had, in fact, left the site earlier and the traditional old rort had another employee clocking off..." (Mr Knight evidently did not go any further at that time to discover the fact that Mr Juhasz's face subsequently appeared against Mr Brown's key when he clocked off shortly thereafter, thereby dispelling Mr Knight's concern that Mr Juhasz had left work early.)

10 Mr Brown and Mr Juhasz were called into the meeting with Mr Knight on Tuesday, 27 January, 2009, which was the next day when both employees were rostered to work together. According to Mr Juhasz, Mr Knight made an allegation against him, which he described as serious, viz:

"I put it to you that Bob Brown clocked you off and you went home early."

Mr Juhasz claimed that Mr Knight accused him of defrauding ASMS - an allegation which Mr Juhasz deeply resented. Mr Knight and Mr Snell, who was present at that meeting and a subsequent meeting on Friday, 30 January, 2009, both deny that at both meetings Mr Knight had accused Mr Juhasz of defrauding ASMS but there is no doubt in my mind that at that time of the first meeting on Tuesday, 27 January, 2009 at least, Mr Knight was acting on the misconception that Mr Juhasz had left the site early and had Mr Brown bundy off for him. 11 Of course, Mr Juhasz had not left the site early. His subsequent photograph against Mr Brown's key tag confirms that fact. Mr Knight claimed that Mr Brown left the meeting, shouting angrily:

Mr Brown rejects Mr Knight's claim that he spoke in an aggressive manner at that time. It seems clear that he would have been agitated over the allegations made to him, however. He approached the AWU which lodged its S.130 notification with respect to the matter on Tuesday, 27 January, 2009.

12 It was intended that there be a further meeting of the two employees on Wednesday, 28 January, 2009 but due to Mr Brown's absence on sick leave, that did not occur. However, Mr Knight did not wish to delay the matter further and arranged the meeting with Mr Juhasz on Friday, 30 January, 2009. Mr Knight recalled Mr Juhasz admitting that when he clocked off on Sunday, 18 January, 2009 he was in a hurry to get away and he stated:

"I was trying to get Bobby Brown out of the way but he wouldn't move. So I suppose I'm guilty of impatience."

13 Mr Knight recorded in the written statement which formed the basis of his evidence that:

"...at the time I felt that the limited version offered to me by Mr Juhasz perhaps may have had an element of authenticity. However, I was concerned that the bundy clock system had been installed for an important purpose and I felt that I had a responsibility to ensure that the system was not going to be undermined by wilful and deliberate misuse or abuse. I informed Mr Juhasz that I considered his explanations were unsatisfactory and that his unpaid suspension would stand. I also informed him that he would be issued with an official final warning regarding his incorrect use of the ASMS timekeeping device..."

14 The S.130 proceedings initiated by the AWU were convened before me on Tuesday, 3 February, 2009 but adjourned for the interview with Mr Brown to be conducted. That meeting occurred on Wednesday, 4 February, 2009. At the meeting Mr Brown asserted that he was guilty of nothing. According to Mr Knight, Mr Brown said:

"I'm guilty of being in the wrong place at the right time. I was just standing in front ready to wipe off when George Juhasz jumped in front of me. There was no shoulder barging or anything like that. He just pushed in."

15 Further investigations by Mr Knight at that time revealed a further apparent, and unexplained, discrepancy with the timekeeping records for Mr Brown and Mr Juhasz as they bundied off on Sunday, 18 January, 2009. The timekeeping records actually showed that at the time Mr Brown was attempting to clock off (when Mr Juhasz butted in) he was, in fact, clocking on again. He had actually clocked off earlier. The sequence of events recorded on the machine for Mr Brown and Mr Juhasz for Sunday, 18 January, 2009 is as follows:

5:52:37 Brown Brown Welcome 5:55:02 Juhasz Juhasz Welcome 18:00:36 Brown Brown Goodbye 18:02:02 Juhasz Brown Goodbye 18:02:19 Brown Brown Welcome 18:02:25 Brown Juhasz Goodbye

In other words, when Mr Brown presented his key tag at the timekeeping machine at the end of his shift [18:02:19], it recorded him as starting his shift and not finishing it. That situation was rectified [18:02:25] when he again presented his tag at the machine, with Mr Juhasz in front of the monitor for the camera. Over the two minutes which had elapsed in the meantime, a number of other employees had bundied on or off on the machine. Mr Henington highlighted that fact in his submissions and the apparent delays in the actions of Mr Brown and Mr Jurasz. I read nothing in that fact. It was the end of a shift and the start of another shift. It would not be unexpected that many employees would be using the timekeeping machine at that time.

16 Mr Knight showed Mr Brown the photograph and, according to Mr Knight, Mr Brown indicated that he could offer no explanation for the timekeeping records. Mr Knight recorded in his written statement that:

"...I showed the photograph image of Mr Juhasz to Mr Brown, explaining to him this new evidence, stating that this puts a whole new complexion on the situation and that I would have to reconsider the incident entirely. Mr Brown stated that he was just as confused with this new evidence and could offer no explanation, adding that the bundy machines can't be reliable, accusing the company of fabricating this incident..."

According to Mr Brown in his evidence in this hearing, the machine sometimes shows "welcome" at the end of a shift, instead of "goodbye" - an error in the system, apparently.

17 It seems likely to me that, in fact, when Mr Juhasz intruded with his tag while Mr Brown was in front of the timekeeping machine [18:02:02] Mr Brown had not realised that the machine had already recorded him as finishing his shift [18:00:36]. The print out of the machine for Sunday, 18 January, 2009 which was provided in evidence in the hearing revealed that other employees had made a similar mistake. There is a beep when the key is processed. It appears to me that sometimes employees bundying on or off do not hear the beep and are consequently uncertain whether or not the machine has recorded that fact. For abundant caution they record the start or finish of their shifts a second time. Bearing in mind that wages for the employees are dependent on timesheets prepared by the employees, entirely independent of the timekeeping equipment, it is of little consequence that the employee is shown bundying on when he was actually bundying off and vice versa. All that is important is that at that time the photograph matches the key tag of the employee: that is the sole purpose of the equipment, as I see it.

18 Mr Knight adjourned the meeting to investigate the matter further and arranged a further meeting on Thursday, 5 February, 2009 at which both Mr Brown and Mr Juhasz attended. According to Mr Knight, Mr Brown indicated that his original statement remained, that he and Mr Juhasz had made no attempt to defraud the company but were just "...dicking around...". Mr Snell also recalls Mr Brown using that language. Mr Juhasz claimed that it was Mr Knight who used that term first and Mr Brown simply agreed with him.

19 Mr Knight asserted that they were, in fact, incorrectly using the bundy clock system and Mr Knight claimed that Mr Brown stated:

Mr Knight had clearly formed the view that the two men had purposely misused the new bundy machine. The AWU representative at the meeting instructed Mr Brown to make no further admissions. Nevertheless, Mr Juhasz also read from a letter he had prepared, admitting that he and Mr Brown had "jostled", argued and "...fucked up...". Mr Knight indicated that he considered the explanations given by Mr Brown and Mr Juhasz as unsatisfactory and the one day suspension and final written warning was to remain.

20 The falsification of time and wages records has always been treated as a very serious offence by any employee involved - both with respect to the employee who bundies another employee on or off in his absence and the employee who allows his colleague to used his bundy card or key in that manner [Pacific Power v. Nieass (1995) 81 IR 46 at p.68]. It clearly constitutes misconduct on the part of an employee justifying dismissal and, in certain circumstances, may also constitute fraud on the employer. In the Tooths Dispute Case (1972) AR 130 for instance, McKeon J of the former State Industrial Commission rejected a claim for the reinstatement of two forklift drivers, commenting (at p.142) that:

"…this case must still be judged on what I have found to be the established facts in it and, therefore, the question is whether, in all the circumstances, the dismissal of (the two employees) call for any intervention. The action of (one employee) in clocking (the other employee's) card was deceitful… In view of all I have said, it cannot be concluded that in this case it was associated with any fraud. But deceit of this kind can so easily be associated with fraudulent action, and its seriousness is quite plain…"

I also explored much the same area in my unreported decision of Tuesday, 12 March, 1991 in the Roads and Traffic Authority Disputes Case [Matter No.1639 of 1990]. In that case I declined to intervene in support of a ganger who had claimed on his time sheets for overtime not worked (but who had subsequently been cleared of criminal proceedings for alleged fraud). I concluded (at p.9) that the dismissed employee in that case had acted improperly in the preparation of his time sheets, viz:

"…Whether or not (his) conduct constituted fraud, it certainly represented a breach of trust… At best, the misstatements in his time sheets represent negligence to a level not consistent with his responsibilities as a ganger. I regard any such misstatements in time and wages records, whether made by fraud or carelessness, as a very serious matter…"

21 A document has been circulated by ASMS management to its employees, outlining, in the form of several questions and answers, issues concerning the working of the new timekeeping system. One such question - "...Can I ask a colleague to clock on or off on my behalf?..." - has this response in the document:

"....Under no circumstances is this permitted. If there are reasons why you cannot clock on or clock off yourself, you must notify your supervisor immediately. An employee who clocks on or off for another employee may be subject to disciplinary action..."

Moreover, I would expect that all employees would be aware that such conduct is unacceptable.

22 Mr Brown and Mr Juhacz claim in their evidence that they have never been told or given any written instructions that they were required to stand in front of the timekeeping machine when they bundied on or off. That is disputed by Mr Knight, Mr Snell and Mr Bain who indicate in their evidence that the operation of the new timekeeping equipment was discussed at tool box meetings and other meeting with employees, including Mr Brown and Mr Juhasz. Mr Phillips has highlighted in his submissions that the documentary material provided to the employees by ASMS management concerning the new timekeeping arrangements does not strictly indicate that employees would need to stand in front of the camera on the equipment but, as Mr Henington submitted, it is no more than commonsense that they do so. I would not expect employees to have to be told to stand in front of the camera when they are having their photograph taken.

23 In any event, in their evidence in this hearing Mr Brown and Mr Juhacz seem to contradict their claim that they were not aware of the need to stand in front of the monitor for the timekeeping equipment as they bundied on or off. What Mr Brown yelled out to Mr Juhasz when they bundied off on Sunday, 18 January, 2009 - "...Hey, your names come up with my photo..." and "...Look what you've done..." - and that Mr Juhacz expected Mr Brown to move out of the way so he could bundy off, suggests clearly that they understood the need to stand in front of the monitor for the timekeeping equipment as they bundied off.

24 The customary case where one employee uses another employee's bundy card or key is where the other employee is absent from work, or left early, and the employee who uses that employee's bundy card or key is covering for him. And the outcome is customarily the dismissal of the employees concerned - not, as in this case, a one day suspension and a written warning (which most likely will prove to be temporary). But in this hearing both Mr Brown and Mr Juhacz were present when they bundied off at the end of their shift on Sunday, 18 January, 2009. That much is clear. Their photographic image confirms that fact, albeit that their image do not match up properly. Either Mr Juhacz butted in with his bundy tag when Mr Brown was standing in front of the machine (the claim by Mr Brown and Mr Juhacz) or they were involved in some hoax with the timekeeping equipment (Mr Knight's suspicion).

25 To my mind, the version advanced by Mr Brown and Mr Juhacz in this hearing is the more plausible explanation. I note that Mr Bain in the written statement which formed the basis of his evidence, commented that:

"....I had formed the view that Mr Knight considered Mr Juhacz's explanation may have been plausible, but was still concerned that there was insufficient evidence to support his explanation..."

And Mr Knight conceded in his written statement that Mr Juhacz's explanation "...perhaps may have had an element of authenticity...".

26 The onus to prove any wrongdoing by Mr Brown and Mr Juhacz falls on Mr Henington in this hearing. In that respect, in Pastrycooks Employees, Biscuit Makers Employees and Flour and Sugar Goods Workers Union v. Gartrell White (No.3) (1990) 35 IR 70 Hungerford J commented (at pp.83 and 84) as follows:

"…It is undoubted, in my view, that the onus for making out a case to warrant the intervention of the Commission in ordering reinstatement is on the claimant union… However, it is also undoubted, in my view, that where an allegation of misconduct is raised as a defence or as a justification for a particular course of action by an employer, such as in summarily dismissing an employee, then the legal burden, in an evidentiary sense, to establish that fact, shifts from the union to the employer…"

Therefore, if there was any doubt in the mind of Mr Knight concerning the genuineness of the claim made by Mr Brown and Mr Juhacz, ASMS management should have given them the benefit of that doubt. Mr Knight clearly had some doubts in that respect but he was prepared to place the worst possible interpretation on the conduct of Mr Brown and Mr Juhacz.

27 It is my understanding from the evidence before me in this hearing that at times bandaids or tape has been placed over the lens for the camera on the timekeeping machine by a person or persons unknown and attempts made to gouge out the lens of the camera. Mr Bain, in particular, has some suspicions over the identity of the culprit but he did not believe that either Mr Brown or Mr Juhacz was the guilty party. In the written statement which formed the basis of his evidence in this hearing Mr Snell recalled a discussion he had with Mr Brown and other employees when he was alerted to the fact that a bandaid had been placed over the camera lens on the new bundy machine, viz:

"....I recall Mr Brown asking me...what will the company do if the bundy camera continues to get covered up. I replied that the company may be forced to install a surveillance camera on the opposite wall directed at the bundy clock. Mr Brown replied sarcastically with words to the effect: 'That's nothing a cherry picker won't fix.'... "

That comment may have been made by Mr Brown flippantly, and inappropriately, but it is no confirmation that he was one of the employees who had placed the bandaid over the camera lens on the bundy machine - and, as I understand his evidence, Mr Snell does not make that allegation against either Mr Brown or Mr Juracz.

28 Also I note that in many of the photographs taken when the employees bundy on or off, which were supplied to me in evidence in this hearing, there are instances where no face appears at all and there is therefore no confirmation that the employee using the machine is who he claims to be and the owner of the key tag. The purpose of the camera is being defeated in that respect. Mr Knight indicated in his evidence in this hearing that some employees were continuing in their practice of not standing directly in front of the camera when they bundied off or were otherwise looking down and covering their face with a cap. That is not a particularly sensible thing for them to do. Mr Phillips submitted that at no time had the employees who had acted in that manner been subjected to any disciplinary action or formal warnings - and they should at least have been counselled over that conduct. Mr Phillips is suggesting in that submission that Mr Brown and Mr Jurasz were being singled out as scapegoats for some reason by ASMS management.

29 I also understand that on occasions a photograph of Prince Charles and the Duchess of Windsor has in the past been placed in front of the monitor for the camera when the employees bundy on or off. Photographs of Prince Charles and the Duchess of Windsor have been pinned to the notice board on the wall of the crib shed, presumably for that purpose. The employees would be wise to cease that practice. They should recognise that, as I indicated earlier in this decision, tampering with timekeeping equipment can, in the proper case, be grounds for disciplinary action, including dismissal. All ASMS employees should treat the timekeeping equipment with considerably more respect than appears to be the case. It is not something to joke about.

30 Mr Knight came ultimately to suspect that Mr Brown and Mr Juhacz were, in fact, tampering with the timekeeping equipment in that manner - "...dicking around...", to use the words attributed to Mr Brown by Mr Knight. Mr Knight formed the view that when Mr Brown used that expression "...dicking around..." he was meaning that the two employees had been skylarking in front of the timekeeping machine. That may be correct. I note from the photographs that neither employee was showing any real anger to one another: Mr Jurasz, for instance, is smiling and some person's hand - no doubt Mr Brown's hand - is shown pushing him in front of the monitor so that his photograph may be taken by the timekeeping equipment. If they were "jostling" one another, as Mr Jurasz has indicated in his evidence, they were not doing it with any aggression to one another. The "debate" between the two men which was described by Mr Jurasz in his evidence would appear to me to have been no more than light-hearted banter. 31 But when Mr Brown used the expression "...dicking around..." and Mr Juracz admitted that he had "jostled" Mr Brown and had "...fucked up...", I do not believe they were admitting that they were acting with any malice against ASMS or that, in particular, they were purposefully trying to defeat the timekeeping equipment by their conduct. In fact, Mr Brown and Mr Juhacz both deny that they did act in that manner. And, in fact, they had not defeated the timekeeping equipment. They were attempting to correct the record by making sure that they both were recorded at the time they ended their shifts. Mr Snell suggested in his evidence that they should have approached him or another supervisor to explain the problem that had arisen at the timekeeping machine. That may be so but, in my opinion, there is still no evidence before me to suggest that either Mr Brown or Mr Juhacz acted in a manner that justified any disciplinary action at all against them, bearing in mind particularly that neither employee had a record of misconduct at the workplace in the past - or, at least, not one which has been brought to my attention in this hearing.

32 Consequently, I direct that ASMS pay Mr Brown and Mr Juhacz for their lost wages for the one day suspension and remove the written warning appearing on their file. But I would expect that all ASMS employees would treat the new timekeeping equipment with more respect and care than has been suggested by the evidence before me in this hearing.

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