Lorenzato and Sydney Water Corporation [2002] NSWIRComm 277

APPLICANT Mr A Britt of counsel Agent: Employment Help Services LEGAL REPRESENTATIVES: RESPONDENT Mr R Crow of counsel instructed by Mr D Fitzgerald, Sydney Water Corporation

JUDGMENT: - 19 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: SAMS DP

Matter No IRC02/2395 ENNIO LORENZATO AND SYDNEY WATER CORPORATION Application by Ennio Lorenzato re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996

1 After twenty-eight years of service with the respondent - Sydney Water Corporation (or it's predecessor entities) - Mr Ennio Lorenzato ("the applicant") was dismissed on 27 March 2002 following an investigation into an alcohol related incident on 29 December 2001.

2 The incident leading to the applicant's dismissal may be summarised as follows. Over the Christmas/New Year 2002 period the applicant was on standby and was entitled to a standby payment under cl 19 of the Sydney Water Award 1994 ("the Award"). On 28 December 2001 the applicant entertained a number of unexpected visitors at his home. He consumed a significant amount of alcohol. He said he stopped drinking at about 1.30am on 29 December and went to bed. At 11.15 am that day, the applicant received a call out. Believing he was fit to drive, the applicant left for the call out in the respondent's vehicle.

3 The applicant was subsequently involved in a motor vehicle accident (which was not his fault) and taken to hospital. He was not seriously injured and was released later that day. A blood sample taken at the hospital revealed a blood alcohol level of 0.118. He was subsequently charged with drink driving.

4 Soon after he was charged, the applicant informed his immediate supervisor, Mr Glen Paxton. The applicant then proceeded on annual leave. On 25 March 2002 the drink driving charge was heard at Burwood Local Court. He pleaded guilty and the charge was dismissed pursuant to s10 of the Crimes (Sentencing Procedure) Act 1999.

5 On 15 March (while on annual leave) the applicant was advised in writing to attend a meeting with management on 27 March. He attended the meeting with his union official, Mr C Nicholson. Also in attendance were Mr Gino Belsito, Manager, Civil Maintenance and Mr Raymond Ryan, Human Resource Manager, Civil Maintenance. As a result of this meeting, Mr Belsito and Mr Ryan concluded as follows: Mr Lorenzato has admitted drinking alcohol whilst on paid standby. Mr Loranzato has admitted that he is aware of Civil Maintenance's policy on drinking alcohol before driving SWC vehicles. Mr Lorenzato has agreed that he could have withdrawn from the standby roster, once he made a decision to have a drink. Mr Lorenzato has admitted that he is aware that what he did was wrong and in breach of SWC policy. In view of the above, and in the absence of any mitigating circumstances the decision was taken to terminate Mr Lorenzato's employment with SWC immediately.

6 On 29 April 2002 the applicant filed a claim for reinstatement pursuant to Pt 6 ch 2 of the Industrial Relations Act 1996 ("the Act"). Attempts by the Commission to conciliate a settlement of the matter were unsuccessful.

7 The applicant maintained that his dismissal was too harsh a penalty for his conduct in that the respondent did not take account of the following mitigating factors: 1. His long period of service and age. 2. His good employment record (the applicant had only one previous warning in December 2000 for attempting to remove a bag of cement from the respondent's premises). 3. The inconsistent application of the respondent's Drug and Alcohol Policy.

8 The respondent maintained that reinstatement on any terms was not acceptable.

9 A finding of unsuccessful conciliation, pursuant to s87 of the Act, was made on 15 May 2002. The matter was listed for arbitration on 22 August 2002. Mr Britt of counsel appeared for the applicant and Mr Crow of counsel appeared for the respondent. Both counsel helpfully expedited the proceedings by focusing on the relevant issues the Commission is required to take into account when determining an unfair dismissal claim based on admitted misconduct.

10 Much of the relevant evidence in this case is not disputed. The applicant gave evidence on his own behalf and the respondent called evidence from Mr Belsito and Mr Ryan. A supervisor, Mr Ian Nisbet, was called to refute the applicant's evidence that he, Mr Nisbet, had persuaded the applicant on two occasions not to accept voluntary redundancy. I do not find this issue or the conflict of evidence over it, to be a relevant factor in my decision in this matter.

11 I turn then to other aspects of the applicant's evidentiary case.

12 The applicant had been employed as a production technician on an average salary of $1,250 per week. Since his dismissal the applicant had applied for some thirty-five to forty jobs. He is currently working part time, two or three days a week as a furniture removalist earning an average of $300 per week.

13 The applicant was cross examined as to the accident report he filled out on 3 January 2002. It disclosed that the applicant answered "no" to the question "Did you consume any alcohol or drugs 12 hours prior to the accident?" The applicant said he filled in the accident report with help from Mr Glen Paxton. Mr Paxton had asked him if he had drunk alcohol on Saturday morning and he had said "no".

14 The applicant gave evidence that he was aware of, and clearly understood the respondent's Drug and Alcohol Policy. He attached the policy to his statement. The policy relevantly provides as follows: Alcohol and Work Alcohol may interfere with workplace performance. It is mandatory in the interests of safety for employees who have to drive a motor vehicle or operate certain machinery for work purposes to be free from alcohol or drugs, which may cause a reduction in the body's capability to respond to an emergency . If an employee's work performance is frequently affected by the influence of alcohol, then their employment with AWT will be closely assessed, which may result in dismissal. Alcohol can have different effects on you. Alcohol is a depressant not a stimulant, therefore it slows your reactions and makes you uncoordinated. Large amounts of alcohol affect muscle co-ordination and reflexes; vision and hearing may also be impaired. Alcohol produces a false sense of confidence about your ability to perform tasks and can also lead to poor judgement.

15 The primary witness for the respondent was Mr Gino Belsito. Annexed to his statement were the following documents: 1) Incident/Accident Report prepared by Mr Glen Paxton. 2) The applicant's report of the accident of 3 January 2002. 3) A quote for repairs to the respondent's damaged vehicle of $16,217.91. It is unclear from the evidence whether the respondent insurer accepted the claim or whether the vehicle was repaired. 4) Conditions for the Use of Fleet Motor Vehicles. These conditions are attached to the Motor Vehicle Weekly Running Sheet and include the following statement: Employees must not under any circumstances drive a vehicle after drinking alcohol or taking drugs that impair physical performance. 5) Letter of 15 March 2002 requiring the applicant to attend a disciplinary meeting on 27 March 2002.

7. A reminder letter to all employees dated 5 October 2000 that not being free from the influence of drugs and/or alcohol at work is a breach of the Code of Business Ethics which is totally unacceptable and could result in the termination of employment.

8. Decision of Tabbaa C in Matter IRC4597/01 concerning Mr Wayne Fogarty.

9. A list of fifteen alcohol related incidents since September 2000 and disciplinary action taken. Since February 2001, four employees had been dismissed and one resigned for alcohol related matters.

10. Decision of Tabbaa C in Matter IRC4009/01 in which the Commissioner refused to reinstate Mr Robert Finch after he was found to have consumed alcohol while on standby (hereinafter referred to as the " Finch case"). However, the Commissioner recommended that the Union and Sydney Water meet to establish a Drug and Alcohol Policy which is free from any ambiguity.

11. WorkCover document "Drugs, alcohol and the workplace" which stated that "Evidence indicates that impairment of mental and motor functions occurs at a blood alcohol level of 0.03%."

16 In oral evidence, Mr Belsito said that the respondent's policy on alcohol consumption was a zero tolerance policy for all employees when at work - including when on standby. He agreed that both the Drug and Alcohol Policy and the Motor Vehicle Running Sheet document did not expressly provide for zero tolerance.

17 Mr Belsito acknowledged that the applicant had freely admitted to the alcohol reading of 0.118% and that he was aware of the respondent's alcohol policy and reminder letters about the policy. Mr Belsito said he considered other forms of disciplinary action. He had made his decision in a ten to fifteen minute break after the meeting on 27 March 2002. Mr Belsito said the applicant did not offer any mitigating circumstances. However, he had told him that he felt fine when he left home after a ten hour break from drinking. Mr Belsito had considered all of the circumstances of the incident, together with the applicant's personal file and long service, but, nevertheless had decided to dismiss him.

18 Mr Belsito was asked about the incident involving Mr Fogarty. He said Mr Fogarty was involved in a motor vehicle accident, but had not been dismissed. Mr Fogarty was a long term employee. After the Fogarty incident, Mr Belsito agreed with Mr Britt that another employee, Mr Tom Mahanga, was not dismissed after a motor vehicle accident involving alcohol. Another employee, Mr Ron Fisher, had also been drinking whilst on standby in April 2001 and had similarly not been dismissed.

19 Mr Belsito acknowledged that the Finch case involved factors not present in this case; namely Mr Finch had not answered a call out and had stayed in a hotel; he had carried out unauthorised private work and failed to record vehicle movements on the running sheets. These factors were all reasons for his dismissal. Mr Belsito accepted that another incident, in which an employee resigned after he purchased alcohol and consumed it at work, was different to the circumstances of this case.

20 Mr Belsito understood that negotiations were continuing with the Australian Services Union to comply with Tabbaa C's recommendation in the Finch case that the Drug and Alcohol Policy should be free of any ambiguity.

21 Mr Raymond Ryan participated in the 27 March 2002 disciplinary meeting and prepared a report and summary of the meeting. However, the primary purpose of Mr Ryan's statement dealt with a request to Professor Graham A Starmer, a Pharmacologist at Sydney University for a report concerning the effects of alcohol in the circumstances of the applicant's incident on 29 December 2001 and medication the applicant was taking at the time.

22 It is noted that this request and the Professor's subsequent report was made some months after the applicant's dismissal and for the express purposes of these proceedings.

23 After a detailed scientific analysis, the Professor concluded that "it would be very difficult to discount the effects of alcohol as a causal factor in the motor vehicle accident in which your employee was involved".

24 In oral evidence Mr Ryan said that, in addition to the applicant's various admissions, he and Mr Belsito considered material put by the union official, Mr Nicholson, in relation to the applicant's service and family situation. Mr Ryan said he did not specifically discuss other disciplinary action with Mr Belsito.

25 Mr Ryan was aware of other employees, namely Mr Fogarty (in 1998) and Mr Mahanga (in 2000) who had been involved in motor vehicle accidents involving the consumption of alcohol. He was aware that the two employees had not been summarily dismissed. He had not discussed these incidents with Mr Belsito on 27 March 2002.

26 Mr Ryan said the applicant had told him in the meeting on 27 March 2002 that he had felt fine when he drove the vehicle on 29 December 2001.

27 Mr Britt, for the applicant, accepted that this case involved no question of witness credibility. All witnesses gave their evidence truthfully. The facts of the case are largely undisputed.

28 Mr Britt said the applicant was fifty-two years old and had twenty-eight years' service. He had received only one warning over his entire period of employment. This warning was totally unrelated to alcohol consumption. The applicant freely conceded that he was aware of the respondent's drug and alcohol policy and reminder letters sent by management about the issue.

29 Mr Britt then traced the history of the matter from the incident on 29 December 2001 to the disciplinary meeting on 27 March 2002. He submitted that in the fifteen to twenty minute break in the disciplinary meeting, Mr Belsito and Mr Ryan did not take appropriate account of the applicant's record of service or the treatment afforded to other employees involved in similar incidents Nor did the respondent consider alternative disciplinary action before dismissing the applicant. See Transport Workers' Union of Australia, New South Wales Branch, on behalf of Joseph Vallis, and TNT Australia Pty Limited t/as TNT Express [2002] NSWIRComm 46.

30 Mr Britt referred to the onus on the applicant to demonstrate that his dismissal was "harsh, unreasonable or unjust" within the meaning of the Act. Matters to be considered by the Commission were to be found in s88 of the Act - although Mr Britt conceded there were no complaints as to the procedure involved in the dismissal.

31 Mr Britt cited a number of decisions relevant to the issue to be determined in this case; namely, that the applicant's dismissal was "harsh" on three bases: i) it was disproportionate to the gravity of the misconduct;

ii) it was harsh in relation to its consequences for the applicant;

iii) it was harsh when compared to the treatment afforded to employees in similar circumstances. See Police Association of New South Wales on behalf of Adam Tregonning and New South Wales Police Service [2000] NSWIRComm 14 and Reed and Southstate Industrial Supplies Pty Ltd [2001] NSWIRComm 185.

32 Mr Britt submitted that there was no evidence that the applicant's conduct was wilful. In fact, the applicant believed he was fine on the morning of the call out and had told Mr Ryan and Mr Belsito as much. At best, Mr Britt said the applicant was negligent.

33 Mr Britt highlighted the contradiction between the respondent's stated policy of zero tolerance to its statements that employees should not drive a vehicle after drinking alcohol which impairs performance. There was also a contradiction to the policy itself. The statements were not in conformity with the unwritten policy of zero tolerance.

34 Mr Britt acknowledged that the applicant had breached the respondent's policy by drinking alcohol whilst on standby. However, there were extenuating circumstances. At all times, the applicant was open and frank with his employer. The exception was the answer to the question on the incident report. But this was explained by the applicant's poor standard of English, his being assisted to complete the form by Mr Paxton and the honest belief he held that he felt fine on the morning of 29 December 2001.

35 Mr Britt cited my decision in Vallis and TNT Express concerning the consequences for a long serving employee summarily dismissed for misconduct.

36 Mr Britt sought the applicant's reinstatement. This was the primary remedy available under the Act. There was no evidence that reinstatement would be impractical. The applicant's age and English skills made it very difficult for him to find alternative employment. Accepting that the applicant was not entirely blameless, Mr Britt said that reinstatement might be considered on terms the Commission considers appropriate.

37 Mr Crow, for the respondent, put that the applicant was on standby on 28 December and was entitled to standby payments in accordance with cl 19 of the Sydney Water Award. He had falsely answered the question on the accident report which asked if he had consumed alcohol in the previous twelve hours. However, Mr Crow accepted that not much turned on this point.

38 Mr Crow submitted that the letter of termination correctly recorded the factual position in respect to the incident. The respondent had convened a disciplinary meeting involving the union and the applicant had been aware of the allegations and been given an opportunity to defend himself.

39 Mr Crow referred to the proper construction of the expression in the Motor Vehicle Running Sheet "Employees must not under any circumstances drive a vehicle after drinking alcohol or taking drugs that impair physical performance". He said the applicant was well aware that it was a condition of his use of a motor vehicle that he must not drive a vehicle after drinking alcohol that impairs physical performance. It was clear, Mr Crow said, that this prohibition applied when an employee was on standby.

40 Mr Crow submitted that the applicant's drinking when friends dropped in unexpectedly was not a mitigating circumstance. Rather, it demonstrated the seriousness of the breach of policy by the applicant. The evidence was that the applicant must have drunk a "huge quantity" of alcohol. The pharmacologist's report suggested that when the applicant stopped drinking, he would have been between 4 to 6.5 times above the legal limit for driving. This conduct demonstrated a cavalier disregard for the obligations the applicant had while on standby and for which he was being paid. The applicant could have advised his unfitness for duty, but didn't do so.

41 Mr Crow denied there was any inconsistency in the treatment of employees. There was absolute consistency since February 2001. There could be no criticism of the short time taken in the meeting on 27 March for the decision to dismiss to be made. It was sufficient for Mr Belsito and Mr Ryan to have regard for all the factors raised in mitigation by the applicant's union official. In any event, management was well familiar with these matters.

42 In all the circumstances, Mr Crow submitted that the applicant's dismissal could not be "harsh". Reinstatement would send an unfortunate message to other employees. He said mere long service should not be a decisive mitigating factor for such a flagrant breach of policy.

43 In reply, Mr Britt said that length of service was not the only factor to be considered in this case.

44 Mr Britt emphasised that the respondent's policy makes reference to the influence of alcohol. It is not a zero tolerance policy. This is inconsistent and absurd.

45 Mr Britt said it was not surprising the applicant didn't call in unfit for work as he felt fine at the time of the call out.

46 At the outset, it should be emphasised that it is not the role of the Commission to replace an employer's decision to dismiss an employee with that of its own (see Busways v Johnson (1994) 55 IR 255 at 261). Rather, the Commission's statutory duty is to make findings as to whether a particular dismissal was "harsh, unreasonable or unjust" within the meaning of the Act in accordance with the relevant tests established by the authorities of the Commission.

47 Both Counsel correctly, in my view, identified that the question to be determined in this case does not require findings going to the credibility of witnesses or disputed evidence. The question is straight forward - was the applicant's dismissal too "harsh" in the circumstances, or to put it colloquially, did the punishment fit the crime?

48 In answering this question, I have had regard for the decision in Electricity Commission of New South Wales t/as Pacific Power v Crump (1993) 48 IR 296: The conciliation commissioner, therefore, in our view of his decision, was concerned that the ultimate sanction of termination of employment was too severe a penalty. That approach was properly open to the conciliation commissioner, notwithstanding his favourable finding as to the action of the appellant, is supported by the decision of Watson J in Metropolitan Meat Industry Board v Australian Meat Industry Employees' Union, New South Wales Branch [1973] AR (NSW) 231 at 233 as follows: I fail to see why in applying this test to determine whether or not he should intervene, and having in mind the considerations referred to by Sheldon J in Loty's case [1971] AR (NSW) 95 at 99, the commissioner (or the Commission on appeal) is precluded from considering whether or not termination was too severe a penalty in all the circumstances - even if the dismissal was legally justified or even if, as Mr McDevitt put it, the point had been reached where at the particular time the employer's representative was faced with a situation which had developed to a stage where he had no other alternative.

In some cases, the issue of unfairness has been resolved because of the way in which the employer has exercised his right to dismiss or because of the absence of adequate justification for dismissal. But even if there are grounds for terminating the contract of employment, it is still open to the tribunal to examine the severity or otherwise of the step of dismissal. The Commission, commissioners and committees have so acted in the past and have intervened to order reinstatement where because of mitigating circumstances or past good conduct, termination has been shown to bee too harsh a consequence. See also Byrne & Anor v Australian Airlines (1995) 61 IR 32; Wells v Commissioner of Police (2000) 100 IR 106 at 118; Busways v Johnson , 55 IR 255; Federated Municipal and Shire Council Employees' Union of Australia, New South Wales Division, on behalf of Gregory Bowman and City of Sydney Council [2001] NSWIRComm 91; Transport Workers' Union of Australia, New South Wales Branch, on behalf of Joseph Vallis and TNT Australia Pty Limited, trading as TNT Express ; Police Association of New South Wales on behalf of Adam Tregonning and New South Wales Police Service and Little v Commissioner of Police No 2 [2002] NSWIRComm 52.

49 As I have often observed, summary dismissal for misconduct can have serious and deleterious implications for an employee. This notion was best expressed in Franklins v Webb (1996) 72 IR 257. The Full Bench said at p261: We consider that the significance of decisions by employers to dismiss employees in circumstances such as occurred here cannot be over-emphasised. Mr Webb is a man of advancing years with long service and an unblemished employment record. The consequences for him of the employer's decision to dismiss are considerable - not only pecuniary considerations arise but also issues such as loss of self-esteem and confidence, difficulty in obtaining future employment and loss of social standing; tremendous upset upon the individual concerned and his family, with serious consequences quite unanticipated at the time of dismissal, must also be taken into account. It is considerations such as those which seem to us to have motivated the Commission in Court Session to remind employers of the need to be fully satisfied after proper investigation that the employee has committed the conduct to support dismissal. See also my comments in Standley v Electronics Boutique Pty Ltd (unreported Sams DP, IRC4516 of 1999, 18 March 1999) and Hill v Department of Juvenile Justice [2000] NSWIRComm 128.

50 In my opinion, a valid summary dismissal for misconduct needs to be accompanied by the conduct being "wilful" such as to constitute a repudiation of the contract of employment by the employee. I rely on the following authorities in this regard: In North v Television Corporation Ltd (1976) 11 ALR 599 where Franki J said at p616: It is clear that a single act of disobedience may be sufficient to justify dismissal on the ground of misconduct but it was held in Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285, that to justify summary dismissal a single act must be such as to show that the employee was repudiating the contract of service or one of its essential conditions. The 1959 English case referred to makes it plain that an act of disobedience or misconduct (justifying dismissal) requires also that the disobedience must be "wilful": … I do, however, think (following the passages which I have already cited) that one act of disobedience or misconduct can justify dismissal only if it is of a nature which goes to show (in effect) that the servant is repudiating the contract, or one of its essential conditions; and for that reason, therefore, I think that one finds in the passages which I have read that the disobedience must at least have the quality that it is "wilful": it does (in other words) connote a deliberate flouting of the essential contractual conditions. (P288). In Day v Lumley Life Limited (1999) 90 IR 70, Hungerford J describes the employment relationship as a serious contractual relationship involving rights and obligations on both sides: The employment relationship, I have to say, is a serious relationship with important incidents for both parties to it. It is a consensual relationship based on contract and with respective rights and obligations. It should not, I think, operate, or to be so seen, in practice in a way, which permits one party, here, the employer, to act in a one-sided manner contrary to the legitimate expectations and understandings of the other party, here the employee, and particularly where such action damages or detrimentally affects the career interests of the employee. Employees have a corresponding duty to act with fidelity and good faith. See also Blyth Chemicals Limited v Bushnell 49 CLR 66 and Hunt v Hornsby Shire Council , [2001] NSWIRComm 242.

51 It seems to me that consideration of whether the applicant's conduct was "wilful" can be answered by reference to the decision of Tabbaa C in the Finch case - particularly as the respondent suggested the two incidents were analogous. Firstly, Mr Finch had twelve years' service; secondly, he had intended to drive a work vehicle after having consumed alcohol while on standby; thirdly, he used the work vehicle for unauthorised private purposes; and fourthly, he falsified the vehicle's running sheet records. These circumstances demonstrate a deliberate and wilful intent by Mr Finch to breach his obligations to the contract of employment. As a consequence, reinstatement was refused.

52 On the other hand the applicant here, while acknowledging a breach of the respondent's policy, could not have known, and did not believe, he was intoxicated at 11.15am in the morning, some ten hours after his last drink. Further, the applicant was driving the vehicle for work related purposes. Moreover, he had twenty-eight years of service with only one blemish.

53 I believe the circumstances in the Finch case to be entirely distinguishable to those in evidence here.

54 To my mind, there was no deliberate or wilful intent by the applicant to breach the respondent's policies in respect to driving a work vehicle while being physically impaired by the influence of alcohol or knowingly being under the influence of alcohol.

55 I accept, of course, that he knew he was in breach of a policy as to drinking while on standby. This concession, in my opinion, is a very different issue.

56 I accept unreservedly - as I believe Mr Crow did - that the applicant's answer to the question on the accident report was an honest mistake. It is reasonable to assume, I think, that the applicant could not have known his blood alcohol level was so affected after having stopped drinking and going to bed ten hours earlier. His evidence, that he felt fine when he received the call out, is entirely believable and understandable. Moreover, the applicant's English language skills are limited.

57 It is not entirely clear to me that the various documents referred to in the evidence are consistent with each other, or the policy itself. There is force to Mr Britt's submission that the reference to not driving while under the influence of alcohol which "impairs physical performance" is inconsistent with Mr Belsito's evidence that the respondent's alcohol policy is actually zero tolerance. Moreover, the policy itself speaks of being "under the influence of alcohol" and being "free from alcohol which may cause a reduction in the body's capability to respond to an emergency". On any objective view of it, these statements are inconsistent with a zero tolerance policy.

58 I note, despite Tabbaa C's misgivings as to the ambiguity of the policy, that negotiations with the Union to remove any ambiguity have not been concluded. In other words, the ambiguities identified by the Commissioner remain unresolved and were unresolved at the time of the applicant's dismissal.

59 This issue, however, has not been decisive in my consideration of this matter.

60 It seems obvious to me that other employees were not dismissed in circumstances which might be said to be more serious and wilful than those disclosed by the evidence in this case. Further, Mr Ryan and Mr Belsito both gave evidence that, while they were aware of other incidents involving employees and alcohol, they had not discussed these incidents when considering the applicant's fate. See Automotive, Food, Metals, Engineering, Printing and Kinded Industries Union, on behalf of Mark Harrison and Keith Donaldson and Australian Co-Operative Foods Limited [2000] NSWIRComm 199 and Burrows v Commissioner of Police; Giardini v Commissioner of Police [2001] NSWIRComm 333.

61 However, the crucial mitigating factor which I believe was not given due weight or consideration was the applicant's long service and largely unblemished record.

62 I note Mr Belsito's handwritten notes do make reference to the applicant's service and family circumstances. However in my view, an employee's long period of service and record of employment are important matters which must be given serious consideration and not cursory passing. For this proposition, I refer to my comments in Vallis and TNT Express: 133 It is generally accepted that an employer may take into account an employee's past conduct or warnings when making a decision to dismiss the employee. Authority for this proposition is found in John Lysaght (Australia) Limited and Federated Ironworkers' Association of Australia, New South Wales Division & Ors (unreported Sheppard J, Matter 259 of 1972, 14 September 1972): The union's argument in relation to this matter is not easy to understand. It suggests that although the record is not a satisfactory one, it should be overlooked because the company, except for a warning and a suspension here or there, allowed it to run on and in effect condoned or waived it. It further says that the record has to be looked at in the light of the fact that there is admittedly a good deal of absenteeism generally in the plant. If one were to take this argument to its full extent, it would involve the union in saying that Mr York should have been dismissed long ago. It is no doubt possible for the company to waive particular acts of misconduct that would otherwise justify dismissal without notice. These particular acts could not subsequently be used for this purpose once a decision was made not to rely on them. The act of misconduct however does not then disappear and become irrelevant when further misconduct occurs. It remains and makes up the continuing history and record of a man's service. That record may always be referred to for the purpose for which the company now points to it and the presence of incidents such as I have described will always be a relevant factor to be weighed in the balance by an employer when he comes to consider whether or not a further breach or other act of misconduct should not bring about dismissal. This will be all the more so where, as here, the dismissal is upon notice.

134 In my opinion, the principle must work both ways. That is, it would be wrong for an employer to ignore an employee's otherwise exemplary record when weighing up all the factors in its decision to dismiss. I adopt the words of McLeay C in Paris v Bankstown City Council [1999] NSWIRComm 10, 22 January 1999: It is clear that no account was taken of mitigating circumstances, either associated with the misconduct (namely, that the applicant's supervisor was the instigator of the misconduct) or the employee's work record (which showed a good record of over forty years). It has long been accepted that the whole of an employment relationship is relevant to a question of dismissal (see John Lysaght (Australia) Ltd v FIA; Re York (1972) AILR 517 per Sheppard J). In my view, it is as unfair to ignore a good work record of long standing as it would be to ignore incidences of previous misconduct. 135 That is not to say that an unblemished record would mitigate completely against a particular act of serious misconduct. Each case will turn on its own facts and the gravity of the misconduct. Nevertheless, it is a factor, which might tip a dismissal either way if the decision is finely balanced. It follows therefore, that an employer should be cognisant of, and give appropriate weight to the employee's past record of employment, having regard for the seriousness of the misconduct.

63 Mr Belsito's letter of 14 February 2001 referring to the Drug and Alcohol Policy includes this sentence "Employees who breach this directive will be dismissed unless unusual mitigating circumstances are proven". Mr Belsito and Mr Ryan's summary of the 27 March disciplinary meeting observed that there was an "absence of any mitigating circumstances". I do not agree for the following reasons.

64 Firstly, in my opinion, the circumstances leading to the applicant's dismissal were most unusual and were not given sufficient weight by the respondent.

65 Secondly, it also seems to me that there was very little thought or consideration given to other penalties or disciplinary action that might have been warranted in the circumstances.

66 Thirdly, the Commission has had regard for the applicant's frank and open admissions, both at the time of his dismissal, and during these proceedings. I believe him to be very sorry for what happened.

67 Fourthly, I have had particular regard for the applicant's age and limited English language skills which make it very difficult for him to obtain comparable alternative employment.

68 Fifthly, it does not appear that the respondent had any regard to the fact that the applicant's drink driving charge had been dismissed under s10(1)(a) of the Crimes (Sentencing Procedure) Act 1999. Section 10(3) requires the court in making an order under s10(1)(a): … to have regard to the following factors: (a) the person's character, antecedents, age, health and mental condition,

(c) the extenuating circumstances in which the offence was committed,

(d) any other matter that the court thinks proper to consider. While I do not suggest that the respondent was obliged to take account of this matter, both the Local Court and this Commission have found extenuating (mitigating) circumstances warranting consideration, whereas the respondent did not.

69 Having regard for these matters it seems to me entirely appropriate to apply the High Court's definition of "harsh" as was expressed in Byrne and Anor v Australian Airlines; namely a termination of employment "may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted". (p72). I am well satisfied that both these descriptors of the term "harsh" can be applied in this case.

70 Accordingly, and for all of the aforementioned reasons, I find the dismissal of the applicant to be "harsh" within the meaning of Pt 6 ch 2 of the Act.

71 Whatever might be said about the remedies available for unfair dismissal under the 1996 Act, the primary remedy has, and has been for many years, reinstatement of an unfairly dismissed employee, see Leeds and Northrup Australia Pty Limited v Hull (1992) 46 IR 11 and Beahan v Bush Boake Allen Australia Ltd (1999) 93 IR 1 As to the practicality of reinstatement I refer to the decision in Hollingsworth v Commissioner of Police No 2 (1999) 88 IR 282, which quoted with approval the decision in Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186 at 191-192, as follows: If the Court were to adopt a general attitude that such a reluctance destroyed the relationship of trust and confidence between employer and employee, and so made reinstatement impracticable, an employee who was terminated after an accusation of wrongdoing but later succeeded in an application under the Division would be denied access to the primary remedy provided by the legislation. Compensation, which is subject to a statutory limit, would be the only available remedy. Consequently, it is important that the Court carefully scrutinise any claim by an employer that reinstatement is impracticable because of a loss of confidence in the employee. Each case must be decided on its own merits. There may be cases where any ripple on the surface of the employment relationship will destroy its viability. For example the life of the employer, or some other person or persons, might depend on the reliability of the terminated employee, and the employer has a reasonable doubt about that reliability. There may be a case where there is a question about the discretion of an employee who is required to handle highly confidential information. But those are relatively uncommon situations. In most cases, the employment relationship is capable of withstanding some friction and doubts. Trust and confidence are concepts of degree. It is rare for any human being to have total trust in another. What is important in the employment relationship is that there be sufficient trust to make the relationship viable and productive . Whether the standard is reached in any particular case must depend upon the circumstances of the particular case. And in assessing that question, it is appropriate to consider the rationality of any attitude taken by a party. It may be difficult or embarrassing for an employer to be required to re-employ a person the employer believed to have been guilty of wrongdoing. The requirement may cause inconvenience to the employer. But if there is such a requirement, it will be because the employee's employment was earlier terminated without a valid reason or without extending procedural fairness to the employee. The problems will be of the employer's own making. If the employer is of even average fair-mindedness, they are likely to prove short-lived. Problems such as this do not necessarily indicate such a loss of confidence as to make the restoration of the employment relationship impracticable. (Emphasis added.) See also Little v Commissioner of Police No 2 and Oswald v New South Wales Police Service (1999) 90 IR 42.

72 Mr Britt pressed for the applicant's reinstatement. There was no evidence advanced by the respondent as to the impracticality of reinstatement; save for Mr Crow's submission that reinstatement would send an "unfortunate message to other employees". I would concur with this submission if the applicant was reinstated with full continuity and payment of all lost wages. However, I do not intend to do so.

73 Having regard for all the circumstances, and Mr Britt's candid acknowledgement that the applicant was not entirely blameless, it is not appropriate that the applicant be reinstated from the date of dismissal without loss of continuity or entitlements. Further, the evidence is that the applicant has worked part-time for some months; albeit for significantly less than he was earning prior to dismissal by the respondent. I have taken this matter into account pursuant to s89(6) of the Act.

74 The Commission proposes therefore to order the applicant's reinstatement to his former position from the date of the arbitration of his claim of unfair dismissal. The applicant's service shall recommence for the purposes of continuity from that date, ie 22 August 2002..

75 The Commission orders: 1) Pursuant to s89(1) of the Industrial Relations Act 1996, that the respondent, Sydney Water Corporation, shall reinstate the applicant to his former position of production technician on terms no less favourable to those which would have applied had he not been dismissed on 27 March 2002.

2. That the applicant be reinstated within fourteen (14) days of today.

3. Pursuant to s89(4) of the Industrial Relations Act 1996, that the applicant's period of service be treated as not to have been broken by the dismissal save for the period between 27 March 2002 and 22 August 2002.

4. Pursuant to s89(3) and (6) of the Industrial Relations Act 1996, the respondent shall pay to the applicant an amount equivalent to his weekly award rate of pay from 22 August 2002 to his reinstatement.

5. The amount in Order 4 shall be paid within twenty-one (21) days of today.

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