Burge v NSW BHP Steel Pty Ltd

FULL BENCH CORAM: WRIGHT J, President WALTON J, Vice-President REDMAN C

Matter No IRC 7060 of 2001 HORNSBY SHIRE COUNCIL and JOHN REGINALD HUNT Application for leave to appeal and appeal against a decision of Grayson DP given on 12 October 2001 in Matter No IRC 6123 of 2001 DECISION OF THE COMMISSION [2002] NSWIRComm 158

1 This matter involves an application for leave to appeal and, subject to leave being granted, an appeal by Hornsby Shire Council against a decision of Grayson DP given on 12 October 2001: Hunt v Hornsby Shire Council [2001] NSWIRComm 242. The decision concerned an application brought under s 84 of the Industrial Relations Act 1996 by the respondent, Mr John Hunt, alleging that his dismissal was harsh, unreasonable or unjust. Grayson DP found in the respondent's favour and made consequential orders for reinstatement, compensation and continuity of employment pursuant to s 89 of the Act.

2 Prior to his dismissal, the respondent was employed by the appellant as a labourer/driver. He had occupied that position since April 1996 and in 1998 was elected to the post of union delegate for the Federated Municipal and Shire Council Employees Union of Australia (MEU). The respondent was dismissed on 20 December 2000 due to what the appellant saw as a number of instances of inappropriate behaviour which jointly, and in some cases severally, constituted misconduct warranting dismissal. Upon his dismissal, the respondent received a termination payment consisting of three weeks payment in lieu of notice plus accrued annual leave, by reference to the Local Government (State) Award.

3 The inappropriate behaviour alleged by the appellant arose from incidents occurring between the period of April 1998 and October 2000, for which the appellant gave the respondent six written warnings and five memoranda. The memoranda, although not formal warnings, were issued by the appellant as a result of what it considered to be further instances of inappropriate behaviour. The appellant considered that, taken together, these instances displayed the respondent's unwillingness to change his behaviour and amounted to serious breaches of the employment contract justifying dismissal.

4 It should be noted that of these eleven episodes, the appellant has chosen to challenge the findings only as to seven. We shall confine our discussion to the findings the subject of challenge by the appellant. The decision appealed from

5 Grayson DP approached the matter by examining each of the episodes the appellant believed combined to warrant dismissal. The first incident occurred in April 1998 and involved the respondent's refusal to drive a truck towing a trailer due to an industrial dispute relating to the payment of allowances for towing. There had been no collective decision to institute work bans and the respondent was acting of his own accord in refusing a number of directions to drive the truck. Further, a union representative had advised the respondent to drive the truck pending resolution of the dispute. In response the appellant issued the respondent with a "Notice of Discipline". His Honour found that the respondent had breached his employment contract, however, it was not of a serious nature. 6 The second incident occurred in July 1998 and involved the respondent failing to replace a blown truck tyre on a truck he had been driving. When the damage occurred, a relief driver loaded the truck on to a tilt-tray truck and returned it to the depot, while the respondent returned to the workplace as a passenger in another truck and took sick leave the following day. Upon his return to work the works superintendent, Mr Amato, told the respondent that his refusal to change the tyre and his absence the following day had resulted in unnecessary downtime. Mr Amato also complained of the respondent's failure to personally notify the mechanics at the workshop of the circumstances in which the damage occurred. The respondent claimed that he had not changed the tyre because it was normal practice for the mechanics or a tyre service to attend to such tasks and further, the truck was not equipped for the tyre to be changed on site.

7 His Honour found that the respondent had clearly not notified the appellant's mechanics and held that he should have reported the damage himself. As to the seriousness of this failure his Honour held that although the respondent deserved some criticism his behaviour could not constitute a serious breach of his employment contract as alleged by the appellant. His Honour also held that the respondent's absence on sick leave the following day was not material to the failures alleged. 8 The third matter involved alleged non-compliance by the respondent with procedures requiring him to notify his supervisor of expected absences relating to union activities. Mr Amato stated that he had issued a memorandum to the respondent outlining the correct procedure in relation to absences resulting from union activities after having received a number of complaints from a supervisor of the respondent. Further, he claimed that he had personally explained the procedure to the respondent shortly after his election as a delegate in 1998. Mr Amato also alleged that the respondent failed to follow the procedure after the memorandum had been issued. His Honour found that there was an ongoing issue with the respondent failing to adhere to the correct procedure, however, this non-compliance could not be categorised as a serious breach.

9 The fourth matter, occurring on 25 August 1999, involved allegations by the appellant that the respondent approached staff in the administration building in an aggressive and rude manner, to investigate whether there was any substance to the rumour that Mr Beggs had contributed to the suicide of an employee in the purchasing office. The respondent was told by the purchasing officer, Mr Price, that his approach was inappropriate and he subsequently left the premises. Within the next few days the respondent was interviewed in the company of a union representative by Mr Amato and human resources manager Ms Margaret Williams. The respondent denied that he was investigating whether there was a connection between the suicide of the employee and the behaviour of Mr Beggs and claimed that he had been investigating complaints in his capacity as chairman of the Equal Employment Opportunities Committee. 10 His Honour found that, on balance, the respondent did give the impression that he was investigating the suicide of the employee and that it was inappropriate behaviour. His Honour also considered that the respondent's actions were deserving of the criticism made by the appellant including a final written warning issued on 10 September 1999. The written warning informed the respondent that if his conduct did not improve his employment would be terminated. 11 The next incident involved an allegation that the respondent spoke to Mr Teesson in an inappropriate and unwarranted manner on 1 February 2000. His Honour did not specify the words used but described them as "strong language". According to the appellant, the respondent was intimidating towards Mr Teesson, who held a supervisory position. His Honour considered that it was likely that the respondent did behave in the manner alleged by the appellant and this was deserving of criticism. The result of this incident was another disciplinary meeting where Mr Amato served the respondent with another written warning and told him that any further incident would result in the termination of his employment. 12 The sixth incident consisted of the respondent walking out of a meeting in which he was acting in his capacity as a union delegate on behalf of another employee, Mr Darren Parkes. The purpose of the meeting was to ascertain why Mr Parkes had not returned to work seven days after a medical appointment. After a heated exchange, which the respondent claimed was brought on by an attempt by a human resources consultant, Mr Jeff Wright, to discuss matters not related to the issue at hand, the respondent and Mr Parkes left the meeting. His Honour made the following observation as to the respondent's behaviour: [111] … regardless of the merit or otherwise of the issues under discussion, it was the applicant's open hostility and confrontational manner of conducting himself in the meeting which again attracted adverse comment from the respondent.

13 The respondent was then required to attend another disciplinary interview on 8 June 2000, where he was represented by the MEU, the outcome of which led to the respondent's attendance at a course entitled "Verbal Judo" directed at assisting him to deal with difficult situations. His Honour noted that a written record taken of the interview indicated that efforts were made by both parties to pursue further training and a modification in the respondent's behaviour towards those with whom he dealt in his capacity as a union delegate. Ultimately the appellant decided against dismissal on the basis of union representations to the effect that the respondent was attempting to manage his anger. However, the appellant again told the respondent that further warning would result in the loss of his employment.

14 As to the discussions with regard to training aimed at modifying the respondent's aggressive behaviour, his Honour further observed: [120] Importantly, as I am disposed, there was a meeting of the minds at this point in time and an acknowledgement that co-operative remedial attention needed to be given to a problem which not only threatened the ongoing viability of the applicant's role as union delegate but also his employment with the respondent.

[121] Of equal importance as I am disposed, is the fact which emerges beacon-like from the evidence and that is, that the applicant's role as a union delegate and his very employment were at risk not because he was a union delegate but because of the manner in which he conducted himself as such.

15 The final matter relates to the respondent's alleged breach of a workplace injury management plan on which he was placed after experiencing elbow pain. The respondent was allocated to a work area for the duration of the plan where he would avoid lifting and shovelling. After reporting for work and being told that there was none due to rain, the respondent went to the appellant's depot and performed work he claimed was within his work injury restrictions, but did not consult his supervisor. The appellant alleged that these actions exposed it to prosecution by the WorkCover Authority, and further, the respondent accepted work from someone other than whom he had been allocated to. The appellant's response to this incident was to refer the respondent's employment to the general manager for review.

16 Grayson DP found that, on the evidence, the respondent's work was within his restrictions. As to the failure to follow procedure, his Honour found that although the respondent did not report to his supervisor before taking up other work, the procedure was not one that was enforced and holding him accountable for breach of an unused procedure was an exaggeration of the seriousness of the event. His Honour also held that, although one could not be critical of an employer for adhering to occupational health and safety requirements, elevating the occurrence to a level warranting the referral of the respondent to the general manager for review was, in the circumstances, an over-reaction. 17 Following this, on 1 November 2000, the respondent was served with a notice to show cause why his employment should not be terminated. The MEU responded to the show cause request on the respondent's behalf and on 20 December 2000 the contents of the response were discussed at a disciplinary meeting. The outcome of the meeting was a letter of termination and three weeks pay in lieu of notice plus accrued annual leave. The reasons for the dismissal were expressed as follows: As discussed with you, the reasons for your termination are that the disciplinary issues which have been brought to your attention constituted serious breaches of your contract of employment with the Council. They invariably involved disobedience of reasonable and lawful orders and directions of Hornsby Shire Council, lack of co-operation and disrespect, and showed clear disregard for occupational health and safety issues potentially exposing the Council to prosecution by the WorkCover Authority. As discussed with you, the response did not justify why your employment should not be terminated and in several parts were plain (sic) argumentative. In our opinion it did not adequately respond to issues we had raised. We also note that Union has raised issues which were dealt with in our letter of 23 November 2000. In some of those cases we repeated that the memoranda that were referred to were not in fact disciplinary issues however, we clearly indicated that such memoranda were necessary given repeated behaviours and disobedience of instructions which were exhibited by you. 18 His Honour considered that the decision as to whether the termination was unfair, rested on a fine balance. Further, the respondent's aggressive manner was an important factor in dealing with this question. His Honour stated that in considering the question of whether the statutory test had been met: [154] … I bear in mind the totality of the evidence and the comprehensive submissions on either side of the record and whilst each of the matters given in evidence is the subject of meticulous attention in the submissions, it seems to me as I have indicated in the course of the reasoning thus far, that much of the respondent's dissatisfaction with the applicant had a basis in the applicant's headstrong and at times belligerent approach to those with whom he came into contact in his elected role particularly those in supervisory positions.

[155] There can be no question that his actions may well have been viewed differently over the course of his employment had his manner of approach to those with whom he dealt in the workplace been different, and from a practical perspective, that is the background against which the matter in its entirety should be viewed.

19 The Deputy President found that the dismissal of the respondent was unfair. This conclusion was arrived at on the basis that although much of the misconduct or unsatisfactory performance allegations had been established, the ultimate sanction of termination was too severe and the respondent should have been disciplined rather than his employment terminated. His Honour was of the view that the conduct did not constitute serious breaches of his employment contract thereby making the penalty of dismissal harsh, unreasonable and unjust. 20 Having found that the dismissal was unfair, Grayson DP went on to consider the appropriate orders. The following sections of transcript were set out in his Honour's decision and thus taken into account in the decision to reinstate the respondent: Q: In terms of Mr Amato who is referred to in the statements in these proceedings, your dealings with him; what did they involve at work, principally? A: Principally, union matters, just that.

Q: Putting aside union matters, how often would you have to deal with him in works duties? A: Very occasionally.

Q: If you were given relief and reinstated, do you propose to seek the position of Head Delegate or Assistant Delegate? A: No.

Q: If you didn't have either of these roles, what would your dealings with Mr Amato be in work? A: Not very often at all.

Q: Have you any difficulties working with Mr Amato in the future? A: No.

21 In view of this, the Deputy President considered that reinstatement was not impractical and made the following observations: [175] In this case and noting the applicant's evidence in this regard, I would respectfully adopt the view expressed by Hungerford, J in Pastrycooks Union v Gartrell White (No.3) (1990) 35 IR 70 at 99 that the process of re-assimilation into the workplace will be materially assisted by his decision to cease being a union delegate. It is a decision to which he should adhere in my opinion. I have no doubt in such circumstances that with time if not immediately a proper employment relationship can be established.

22 Grayson DP then made orders for reinstatement and payment of lost earnings. Taking into account the respondent's own contribution to his predicament, he was awarded 26 weeks in lost earnings, rather than the total amount lost, and his continuity of employment was ordered not to have been broken.

23 Mr R F Crow of counsel, who appeared for the appellant, submitted that his Honour has committed appellable error in finding the dismissal was unfair primarily because his Honour failed to ascribe the proper degree of seriousness to four episodes of misconduct all of which constituted behaviour justifying dismissal. Further, the findings his Honour did make in relation to those episodes (and a further three incidents with respect to which his Honour found inappropriate behaviour on the part of the respondent), when taken as a whole (in terms of the aggregated or cumulative effect of the episodes) were sufficient to justify the respondent's dismissal. The dismissal was an appropriate response to the respondent's overall unsuitability for employment and his poor disciplinary record.

24 The four episodes of misconduct that the appellant submitted his Honour did not properly assess were the respondent's approach to staff in the administration building in relation to the suicide of an employee; aggressive and rude manner towards one of his supervisors, Mr Teesson; abrupt exit from the interview in which he was representing Mr Parkes and failure to adhere to the workplace injury management plan.

25 The appellant submitted that there occurred other episodes which were sufficient to justify dismissal, namely, the respondent's refusal to drive the truck towing the trailer; the failure to replace the blown truck tyre and the failure to use proper procedure when absent on union business.

26 It was further submitted that his Honour incorrectly approached the issue of whether the termination was unfair by considering whether each episode justified dismissal. The appellant contended that this approach ultimately led his Honour into error. Rather than looking at each episode individually, his Honour should have considered the conduct in total and held that the aggregation of the conduct warranted dismissal.

27 It was also submitted that such an approach would accord with that taken in Re Clarke and Metropolitan Meat Industry Board [1967] AR (NSW) 16, where it was held by Cook J that in deciding whether or not to terminate an employee's services, an employer was entitled, subject to the observance of award requirements, to have regard to the previous conduct of the employee. The appellant contended that the different approach taken by Grayson DP suggested that an employer was unable to aggregate a series of episodes and rely upon them to terminate employment. It was thereby submitted that the issue was whether an employer was able to dismiss an employee in accordance with award provisions on the basis of a history of poor performance.

28 In the alternative, the appellant submitted that, given the aggregate seriousness of these episodes, his Honour should not have exercised his discretion to reinstate the respondent. In this regard, his Honour has been influenced in his conclusions by the respondent's decision to cease being a union delegate. The appellant submitted that there was no way that the Commission can ensure this will occur and in that sense, if the balance were finely in favour of reinstatement on that basis, the Commission should not order reinstatement.

29 Mr A A Hatcher of counsel, who appeared on behalf of the respondent, submitted that the appellant's challenge to his Honour's decision was simply an attempt to have the Full Bench form its own view on the matter absent any appellable error. Mr Hatcher contended that the appellant had not challenged any of the findings of fact which formed the basis of his Honour's conclusions as to the seriousness or otherwise of the conduct and contended that this made it difficult to find any basis for error in his Honour's assessment of the seriousness of the alleged misconduct. 30 Mr Hatcher further submitted on behalf of the respondent that his Honour, contrary to the appellant's submissions on appeal, did consider the history of the respondent's employment and was prepared to take into account everything in that history. Mr Hatcher relied in this respect upon his Honour's rejection of a submission made at first instance on behalf of the respondent that the episodes resulting in the issuing of memoranda should not be taken into account.

31 The respondent also drew attention to his Honour's findings as to the deteriorating relationships between the respondent and his superiors. Looking at the incidents as a whole, there are some cases where the respondent "pushed the envelope", but overall there is nothing in his conduct warranting his dismissal. There were instead problem relationships with supervisors which caused difficulties for the respondent. This was also a feature of the disciplinary procedures that had been taken against him.

32 In summary, it was submitted that Grayson DP made a carefully reasoned decision by considering each incident raised, reaching conclusions as to those incidents, and at the end of the day assessing that the totality of the circumstances did not warrant the dismissal of the respondent. There is nothing in the approach adopted by his Honour which required review. Nor should his Honour have taken the approach of Cook J in the Metropolitan Meat Board case. The issue is whether his Honour has erred in any way, and more specifically, whether his Honour has erred in finding the dismissal of the respondent was unfair.

33 The appellant submitted that leave should be granted as a matter of public interest as his Honour's incorrect assessments of the seriousness of the conduct will encourage misconduct in the workplace and weaken the ability of employers to control employee misconduct. In the alternative, the appellant submitted that leave should be granted in order to rectify his Honour's error in reinstating the respondent.

34 The respondent opposed leave on the basis that his Honour's decision was made in accordance with the particular facts and circumstances of the matter and the inferences which may be drawn from those facts. It is contended that there is no issue of principle which required appellate review and no error in the nature of House v The King (1936) 55 CLR 499 at 505 had been established by the appellant.

35 Section 188(1) of the Industrial Relations Act provides that an appeal to a Full Bench of the Commission may be made only by leave of the Full Bench. Principles applicable to the granting of leave to appeal were settled by the Full Bench in Knowles v Anglican Church Property Trust (No 2) (1999) 95 IR 380 at 381 and in subsequent decisions which have followed and applied Knowles (No 2).

36 The approach to be adopted on appeal is governed by s 191 of the Act and has now been authoritatively determined in a number of Full Bench decisions: see, for example, Wilson v Department of Education and Training (2000) 100 IR 1 at 11 -12 in paragraphs [60] - [70] and in Burge v NSW BHP Steel Pty Ltd (2001) 105 IR 325 at 327 - 328 in paragraphs [7] - [8]. See also, CGEA Transport Ltd t/as Southtrans v Transport Workers' Union of Australia (2001) 110 IR 211 and D & R Commercial Pty Ltd and Flood [2002] NSWIRComm 88. We adopt those principles for the purposes of this appeal.

37 After careful consideration of this matter, we have decided to grant leave to appeal. We do not, however, consider that Grayson DP has made any appellable error of the kind identified in House v The King. Nor do we consider that his Honour has incorrectly approached the question of whether the dismissal came within the relevant statutory test, or has, as the appellant contended, indicated in an express or implied way, that an employer may not review the totality of an employee's history and dismiss the employee on the basis of its dissatisfaction with that history.

38 His Honour's findings were made after a review of the evidence and may be described as falling into two categories. His Honour either found the incidents alleged exhibited no wrong doing on the part of the respondent and should not have been a disciplinary issue or the respondent did exhibit inappropriate behaviour which deserved criticism but did not warrant dismissal. Perhaps more importantly, his Honour considered there was a further explanation for the conflict between the appellant's officers and the respondent. Many of the incidents occurred in the context of an increasingly difficult relationship between the appellant and the respondent which caused, at times, exaggerated conflict and unnecessarily negative reactions from both the appellant and the respondent.

39 In particular, the respondent's manner was a cause of such problems. His Honour noted that the respondent was often somewhat aggressive and belligerent and much of the appellant's dissatisfaction arose from this less than gentle manner. This behaviour was particularly evident when the respondent was engaged in union duties and particularly towards his supervisors. The incident where the respondent abruptly left the disciplinary meeting in which he was assisting Mr Parkes is one example of this. Grayson DP recognised that it was the respondent's open hostility towards his supervisors which drew criticism from the appellant, rather than the issues discussed at the interview or the respondent's early exit from the meeting. It was also clear that the respondent had considerable difficulty in assimilating the role of union delegate with his duties and obligations as an employee, although we would note that, as recognised by Grayson DP, a union delegate may be appropriately required to firmly state a position on behalf of a union member or members, contrary to the views of management. This should not constitute any basis for disciplinary action.

40 The particular way in which Grayson DP dealt with this consideration in his decision and as to the grant of remedy is referred to subsequently. It may be observed here that the findings as to difficulties created for the respondent by his delegate role and the effect of them on the working relationship were open on the evidence. Nevertheless, they represent relatively unusual circumstances in unfair dismissal proceedings and could be said to be circumstances which explained, although not justified, in their own way the conduct which might otherwise be incapable of explanation. Similarly unusual was the way in which the tribunal exercised its capacity to grant a remedy on the basis of a condition or expectation of relevant change in the situation which should reasonably ensure and require no further repetition of such conduct. Those considerations serve to demonstrate the almost unique circumstances of the findings and grant of relief which occurred at first instance. As such, they provide a basis for the grant of leave to appeal. However, because of our conclusion that the findings made by the Deputy President and his overall decision were open to him, those matters do not lead to the upholding of the appeal.

41 We also do not consider his Honour's approach of examining each incident separately to be incorrect. The examination of each incident was a necessary part of his Honour's decision, particularly in light of the context of the troubled relationship between the parties although we would note that the examination by the Deputy President as to whether the contract of employment had been breached at each turn was unnecessary and may result in error. We are satisfied, however, that his Honour ultimately applied the contemporary and thus the correct test namely, whether the dismissal was harsh, unreasonable or unjust. Further, the decision in the Metropolitan Meat Board case does not require an approach whereby the employment history is to be aggregated in order to assess the fairness of a dismissal. That decision stands for the proposition that an employer may have regard to the previous conduct of an employee when making a decision to dismiss in accordance with award provisions. The statutory test is directed to the question of whether, on the evidence and in relation to the circumstances of the particular case, the dismissal was harsh, unreasonable or unjust. That is the paramount concern displacing other questions, as we have noted, such as whether the termination was lawful: Inghams Enterprises Pty Limited v Bruce (1995) 60 IR 365 at 380. It is a question involving the exercise of judgment and discretion in accordance with the statutory provisions.

42 Thus in a situation such as the present, the previous conduct was explained either as not involving any wrongdoing or as inappropriate but not serious, and occurring within the context of an increasingly difficult relationship. His Honour came to the conclusion that this conduct was either to be disregarded or was not serious enough to be considered a justification for dismissal, which was too severe a penalty in all of the circumstances. The fact that the employer may not have available a lesser penalty such as demotion cannot remove the capacity in the tribunal to make such finding and to act on it.

43 This leads to the final issue. The decision of Grayson DP that reinstatement of the respondent was not impractical. This decision was made in light of the evidence that the respondent gave at hearing to the effect that he would not again seek to become a union delegate.

44 In this regard paragraph [175] of the decision has already been cited. Paragraph [168], which was in these terms, was also relevant to this matter: That is not to say there should not be, on the part of the elected delegate, vigorous pursuit of improvements in conditions of employment but where as here the behaviour of the delegate rather than issue being pursued becomes the primary focus, it seems to me to be time for measured and careful attention to be given to alternatives. (emphasis added) It may be said that the grant of the remedy was made, if not on the condition that the respondent would adhere to this decision expressed in that respect, at least in the clear expectation that it would be.

45 It was in the role of union delegate that the respondent and the appellant experienced much of their conflict. In particular, the respondent had difficulty in dealing with Mr Amato with whom he would be unlikely to come into contact again and if he did, certainly not be at the same level of intensity.

46 For that reason, his Honour was of the view that the respondent would be able to reassimilate into the workplace. That conclusion arose primarily from the fact that ceasing union delegate duties would mean that the respondent would not be involved in many dealings with Mr Amato, the works superintendent, and that his inappropriate conduct had largely resulted from his difficulties in balancing the role of delegate with his other employment responsibilities. The evidence revealed that much of the problematic dealings the appellant had with the respondent arose from the interactions between Mr Amato and the respondent. These conclusions were also open. Further, in making the order of reinstatement, his Honour recognised that the respondent must share an element of fault for his dismissal and thereby refused to award to the respondent the total amount of wages lost. It therefore could not be said that the decision encourages or condones misconduct: see Electricity Commission of New South Wales t/as Pacific Power v Crump (1993) 48 IR 296.

47 Accordingly, the Full Bench makes the following orders: 1. Leave to appeal granted. 2. The appeal is dismissed. 3. The appellant shall within seven days pay to the respondent the monies specified in order 4 of the consent stay orders made herein.

4. The stay orders are otherwise dissolved. ______________

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