National Union of Workers, New South Wales Branch (on behalf of Miguel Reyes) and Bing Lee Pty Ltd [2005] NSWIRComm 1139

LEGISLATION CITED: Industrial Relations Act 1996

APPLICANT Mr A Joseph of counsel LEGAL REPRESENTATIVES: RESPONDENT Ms E Brus of counsel

DECISION: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

Matter No IRC 1317 of 2005 NOTIFICATION UNDER SECTION 130 BY NATIONAL UNION OF WORKERS, NEW SOUTH WALES BRANCH OF A DISPUTE WITH BING LEE PTY LTD RE DISMISSAL NOTICE

Matter No IRC 3129 of 2005 NATIONAL UNION OF WORKERS, NEW SOUTH WALES BRANCH (ON BEHALF OF MIGUEL REYES) AND BING LEE PTY LTD Application by National Union of Workers, New South Wales Branch on behalf of its member Miguel Reyes re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996

1 Miguel Reyes worked for the well-known retailer Bing Lee Pty Ltd for approximately four years as a storeperson. His employment was without adverse incident until early 2005, when he was given three warnings over six weeks, the last of which served as a dismissal notice.

2 The National Union of Workers, New South Wales Branch filed a dispute notification under s130 of the Industrial Relations Act 1996 seeking, among other matters, the reinstatement of Mr Reyes to his former position. When the dispute proceedings (initially allocated to O'Neill C before a disqualification under s173 of the Act) did not resolve the matter, the union subsequently made an unfair dismissal application under s84 of the Act. Although the unfair dismissal application was out of time, I am satisfied there is sufficient reason to accept the late application given that the dispute notification seeking reinstatement had been filed promptly after the dismissal.

3 The union contended Mr Reyes had a spotless employment history until he became a union member and co-delegate in late-2004. The union's unfair dismissal application further contended the reasons for the dismissal were spurious and unreasonable, and that Mr Reyes was not afforded proper procedural process. Counsel for the union, Mr A Joseph, submitted it was not necessary to make findings as to the union membership issue, as there was sufficient material before the Commission to otherwise find the dismissal was harsh, unreasonable and unjust.

Background 4 Mr Reyes was dismissed against the background of three discrete matters, which I shall refer to as the "catalogue" warning, the "stock control" warning and the "forklift" warning. It is to a consideration of those matters I now turn.

5 The catalogue warning: Mr Reyes's ex-wife had a contractual arrangement with a company named PMP Distribution to distribute retailers' printed advertising materials. Apparently, Mrs Reyes (or those working with her or for her business) did not distribute all the PMP materials, because Mr Reyes deposited advertising catalogues in the commercial waste bins or recycling bins at Bing Lee's distribution centre. Mr Reyes said he obtained permission from a former manager named Jimmy Lee to use Bing Lee's bins to dispose of rubbish or advertising materials, or both, and another, unnamed manager also knew about the matter. Mr Reyes said he commented to Jimmy Lee every so often that he threw some bundles in the bins. There was no evidence to contradict the evidence of Mr Reyes in these respects.

6 Kenneth Lee is the Chief Executive Officer of Bing Lee. By some means or another, Mr Lee became aware that Mr Reyes had disposed of advertising catalogues in Bing Lee's bins. Mr Lee directed an employee to get into a bin to retrieve a bundle of catalogues. Mr Lee was very concerned that Mr Reyes had, apparently, dumped new advertising catalogues. His concerns were multi-layered. First, Mr Lee was troubled at the prosect that Bing Lee's own, expensive advertising materials were being similarly dumped in the way Mr Reyes had dumped another retailer's advertising catalogues. Second, Mr Lee was concerned about Mr Reyes's general trustworthiness, given his apparent involvement in dumping catalogues that someone had been paid to distribute. Third, when Mr Lee asked Mr Reyes about the matter, Mr Reyes confirmed he had dumped the catalogues but assured Mr Lee he had not dumped any Bing Lee catalogues. Mr Reyes added, however, that everyone dumped advertising catalogues and, further, he had once seen Bing Lee advertising materials waiting to be dumped (being old newspaper inserts). This advice exacerbated Mr Lee's concerns. When Mr Lee asked Mr Reyes why he did not inform Bing Lee that its advertising materials had been dumped, Mr Reyes "shrugged his shoulders" and replied, "It's not my job". Mr Reyes's advice that it was not his job even further exacerbated Mr Lee's concerns, as Mr Lee did not consider this to be a response or attitude befitting a member of the Bing Lee "team". Mr Lee wrote a letter on the spot and handed it to Mr Reyes. The letter warned Mr Reyes not to dump new catalogues in Bing Lee's bins in future. There was no evidence to indicate Mr Reyes dumped any further materials in the bins after he received the warning from Mr Lee.

7 In addition to warning Mr Reyes, Bing Lee also reported the dumping to PMP. Mrs Reyes's contract was terminated by PMP, partly or in whole as a consequence of Bing Lee's report.

8 The stock control warning: In 2004-2005, Bing Lee was encountering problems with stock losses at the warehouse; at least 18 plasma screen televisions were missing. The company installed surveillance cameras and employees were filmed through digitally recording at the workplace. It is unclear whether the surveillance accorded with relevant legislation, but that issue was not pressed by counsel for the union.

9 The recordings were, apparently, reviewed by Bing Lee managers (who had received a tip-off about stealing) and then given to the police. In January 2005, the police laid criminal charges against a Bing Lee contract driver and two Bing Lee employees. It transpired that extra stock was deliberately loaded onto trucks so it could be offloaded at a location away from the workplace and stolen. It seems there were some convictions and acquittals, but there was little before the Commission as to those matters.

10 Mr Reyes was not the subject of any criminal charges. The managers of Bing Lee were, nonetheless, concerned about Mr Reyes's role in stock control. Mr Reyes was called to a meeting on 22 February 2005 to view a recording which showed him at work with one of the employees who had been charged by the police. Mr Reyes was questioned at the meeting on 22 February 2005 about what was recorded on footage of either 15 December 2004 or 4 January 2005 (there was disagreement as to the date of the footage). Despite the intended purpose of the meeting, Mr Reyes was not afforded the opportunity of being given advice as to why he was called to the meeting, nor the opportunity of having a witness present.

11 The delay between the recording of the footage and holding a meeting on 22 February 2005 was attributed to the sensitivity associated with police investigations that were being conducted around that time. Similarly, the warning concerning stock control was signed by Mr Lee on 22 February 2005, but not issued to Mr Reyes until 9 March 2005 - apparently to allow the company time to talk to a detective about the matter. The warning notice relevantly read: 22nd February Miguel was asked to head office to review and discuss an incident which was captured on our surveillance cameras [on?] 10 and 11. This clearly showed Miguel was in control and checking stock with paperwork loading into truck for Fishwick[sic]. Surveillance was shown extra stock loaded into truck Miguel admit he did not check the stock. Miguel was entrusted to do the important job and that was not carried out properly causing stock loss.

12 Mr Reyes did not agree with the contents of the warning and declined to countersign it.

13 Mr Reyes asked to view the recording again so "we could all watch it together and decide whether I was guilty of something". Mr Reyes said he was shown only one part of the recording and there had been a lot of fast-forwarding and re-winding. According to Mr Reyes, a manager named Claudio Musa said the company would investigate the matter further, but it would be better if he resigned. The union was involved in either this discussion or a subsequent discussion concerning the request for a second viewing. Mr Musa's evidence seemed consonant with the proposition that a second viewing had been requested by Mr Reyes but this was not organised. The reason why a further viewing was not arranged was unclear on the evidence.

14 The forklift warning: It is common ground Mr Reyes had a collision, of some sorts, with part of a structure at the workplace when driving a forklift vehicle. According to Mr Reyes, the incident was minor and resulted in "a scratch" on the structure in question, namely a metal skirting on a building. Mr Reyes thought the incident was so minor it did not warrant being reported, despite the then newly promulgated policy that all incidents and accidents, no matter how small, were to be reported.

15 A few days later, Jason Naulty, who was Mr Reyes's supervisor, observed some structural damage to the same building, including a piece of dangling metal. The damage was sufficient to require the prompt removal of the dangling metal so it would not pose an occupational health and safety hazard. The building also needed some subsequent remediation by a tradesperson. It is unclear when the metal skirting had become detached, and no evidence as to whether the structure had been seen by anyone in that hazardous condition between the date when Mr Reyes had his accident and when Mr Nautly noticed the damage. Certainly, no one else had reported seeing the dangling metal, even though employees would have worked in that area during the time that elapsed between the incident and Mr Naulty's observation.

16 Mr Naulty asked a number of employees if they knew anything about the damage, including Mr Reyes. Mr Reyes admitted to Mr Naulty he hit the structure a few days earlier, but denied being responsible for the more extensive damage that was, by then, apparent. Mr Reyes speculated that someone else had caused additional damage after his initial accident and thought the nature of the damage was consistent with that view.

17 Mr Naulty had personally introduced mandatory reporting requirements for all incidents and accidents, given his concern to improve occupational health and safety standards at the workplace. However, Mr Reyes had not informed anyone about the forklift vehicle incident until directly questioned by Mr Naulty. Mr Naulty informed Mr Lee about the matter. On Mr Lee's instruction, a written notice was issued which both referred to the forklift incident and advised of dismissal.

Consideration 18 As to the catalogue warning, the evidence established one bundle of catalogues was retrieved from a bin on the instruction of Mr Lee. Mr Reyes gave evidence that he had obtained approval from Jimmy Lee, the previous manager of the warehouse, to use the company's bins and that he informed Mr Lee of this when asked about the catalogues. Mr Reyes's evidence in this respect was that he said to Mr Lee when warned: "Well, okay, but I understood from Jimmy that it was okay to dump the catalogues if there was room in the bin".

19 Mr Lee could not remember Mr Reyes having said these words, but did not deny they had been said. The former manager was not called to give evidence on the topic of the approval. I think it may be accepted that Mr Reyes had obtained express permission from Jimmy Lee to use Bin Lee's bins for non-Bing Lee purposes. The evidence did not establish that any more than one bundle of catalogues was deposited in Bing Lee's bins by Mr Reyes, and it was not established whether this was a small or large bundle. It may be inferred, however, that other advertising materials, of an indeterminate quantity, had been dumped previously as Mr Reyes had sought and obtained Jimmy Lee's approval for using the commercial bins at some time in the past.

20 Although Mr Reyes had obtained prior permission to use Bing Lee's bins, one can appreciate the concerns Mr Lee had about the matter given his impassioned evidence as to his personal perceptions about Mr Reyes. The evidence did not, however, establish Mr Reyes had acted with personal impropriety, despite Mr Lee's assessment that Mr Reyes had been involved in "cheating" another company. Evidence was not adduced as to the status of the bundle of catalogues in question, or any previous materials, and why they were dumped in the bin by Mr Reyes so as to establish the company's views about cheating. It is possible Mr Reyes was dumping catalogues his ex-wife had been paid to distribute and, for instance, knowingly participated in a breach of her contractual obligations to PMP Distribution. It is also possible, for instance, that the catalogues Mr Reyes dumped were surplus or out-of-date. For instance, the evidence of Mr Reyes as to the advertising materials generally was: My wife is a contractor, she gets those pamphlets delivered and then gives them to other people to deliver or to distribute. The ones they have left over they bring back to my home. Usually the company picks them up and by Christmas time if there's a big quantity sometimes they ask us to store them. There was not enough room because the company can't pick them up in time and so they would accumulate, and so I would take them to the recycle bin.

21 While Mr Lee certainly suspected Mr Reyes was involved in something untoward in relation to the advertising materials and there was evidence that PMP ceased contracting with Mrs Reyes, conduct such as personal impropriety on the part of Mr Reyes was not established on the evidence adduced in these proceedings in relation to the catalogues. Looked at another way, there was no evidence of large scale dumping and, given Mr Reyes's description of the materials in his evidence, the company's evidence did not indicate the catalogues were current when they were retrieved from the bin.

22 It was, of course, open to Mr Lee to countermand, as it were, the previous permission that Jimmy Lee had given to Mr Reyes concerning the use of Bing Lee facilities and to instruct Mr Reyes not to dispose of catalogues in the bins in future. However, it seems inappropriate that Mr Reyes should have been given a formal warning for doing something for which he had obtained prior managerial permission, where that warning was to be part of the trio of warnings which formed the basis for dismissal.

23 As to the second warning notice, Mr Reyes's evidence was that he was called to a meeting on 22 February 2005 and shown a recording dated 15 December 2004. Mr Reyes deposed that he appeared in the recording only once. According to Mr Reyes, he was recorded being handed paperwork for a particular load by an office assistant, which he then handed directly to the another person, namely, the storeperson responsible for loading the truck.

24 Mr Musa is a long-standing employee of the company. He was relocated to the warehouse for six weeks to act in a managerial position to investigate the missing stock. He was involved in viewing the recordings of staff as part of his investigation. In contrast with Mr Reyes's evidence, Mr Musa deposed that at the meeting on 22 February 2005 Mr Reyes viewed a recording dated 4 January 2005, which showed the following: . Mr Reyes picking items of stock not contained on any of the consignment lists; . Mr Reyes directing that items of stock not contained on any of the consignment lists be loaded onto the delivery truck; . Mr Reyes arranging two fridges as they were loaded onto the truck, being stock that was not contained on any of the consignment sheets; . Mr Reyes being the only person holding and checking items of stock against consignment sheets to be loaded onto the truck to Fyshwick; . Mr Reyes holding the consignment sheets (with the result that no other employee was responsible for the correct items being loaded onto the truck and no other employee would have had the ability to check the stock); and . Mr Reyes walking around the truck at the same time the fridges were on the truck's loading bar.

25 Mr Musa added that the recording showed Mr Reyes putting the stock out, getting it ready for the forklift. Mr Musa conceded in cross-examination that another person, rather than Mr Reyes, was loading with a forklift truck but maintained the person who was loading could not have known what to load unless he was holding the paperwork. In Mr Musa's opinion, the recording of 4 January 2005 showed Mr Reyes failed to pick correctly items of stock to be loaded onto the truck, failed to supervise properly the loading of the truck and failed to check properly the items loaded onto the truck against the consignment sheet. Mr Musa deposed at least four items of stock were loaded onto the truck on 4 January 2005 that did not appear on any consignment sheet (and, I gather, were stolen after the truck left the workplace).

26 The evidence of Mr Reyes and Mr Musa in relation to the recording was incompatible. The witnesses did not agree even on the date of the recording, let alone what it showed. That is, on Mr Reyes's account he was shown a recording dated 15 December 2004 in which he made a cameo appearance with an office assistant, before handing paperwork to the storeperson responsible for loading the truck. Mr Reyes said that if he was shown checking stock, it was a recent delivery of Samsung stock that was being unloaded. Mr Reyes was adamant he did not have the consignment sheets for the outgoing goods; the paperwork he was holding was relevant to an incoming delivery. He denied the recording showed him loading anything on the outgoing truck. In contrast, on Mr Musa's account, the recording showed events on 4 January 2005 and recorded Mr Reyes personally picking stock that was not contained on any consignment sheet, directing that stock not contained on any consignment sheet be loaded on the truck, and arranging stock not contained on any consignment sheet as the stock was loaded on the truck. Mr Musa also deposed that Mr Reyes was the only person holding and checking items of stock against consignment sheets.

27 During the proceedings, I clarified that a recording was produced by the company to the union further to a notice to produce issued in the course of the proceedings. Although a recording of some description was available to both parties, neither adduced any part of a recording into evidence. It may be noted that the union's notice to produce principally concerned footage of 15 December 2005. That is, the notice to produce sought the following:

1. Video surveillance footage from camera numbers "10" and "11" at the Bing Lee Villawood warehouse site taken on December 15th 2004, which formed the basis of disciplinary action taken against Mr Reyes.

2. Video surveillance footage from any camera at the Bing Lee Villwood warehouse site taken on December 15th 2004, or on any other date whose images formed the basis of disciplinary action against Mr Reyes.

28 The recording or an edited version of it would, I assume, have been the best evidence available each party to establish objectively the date of the recording and what was filmed even though counsel for the company, Ms E Brus, submitted, without demur from Mr Joseph, that the recording was "not terribly enlightening by itself" and it did not benefit either party's case. I have not had the benefit of watching the recording which formed the basis of the warning concerning stock control, even though it is necessary, as part of the determination of this matter, to make findings concerning the basis for the second warning notice. I am left with the comparatively disadvantaged situation of considering the competing, and incompatible, witness opinion as to the date of the recording and its contents. The question of what the recording showed effectively was left to be determined on the basis of which witnesses' recollection should be preferred as to its date and description of its contents, but the divergences were not squarely put to the witnesses in cross-examination, i.e., Ms Brus began to ask Mr Reyes about the date, but moved to another area of questioning; and Mr Joseph's cross-examination did not touch on the matter at all.

29 Matters become even more clouded when the evidence of Mr Lee is considered. Mr Lee played the recording to Mr Reyes on 22 February 2005. Mr Lee's evidence indicated he thought (based possibly on Mr Musa's assessment of what was shown on the recording) that Mr Reyes was shown personally loading the stolen stock onto the truck, but even Mr Musa's own evidence did not put the matter that high. Moreover, Mr Musa was of the view that Mr Reyes had the consignment sheet in question because Mr Reyes was shown obtaining the driver's signature. However, there was no evidence that a consignment sheet had been generated in relation to the stolen stock - that seems to have been part of the stock control problem. Some of the attachments to affidavit evidence concerning certain items of stock were of very poor quality and the originals were not otherwise available. Some were signed some were not, and nor was it established who had signed such documents and when they had been signed.

30 I think it may be inferred Mr Reyes was not recorded doing all the things alleged in the company's evidence to have been recorded. I think there is a real possibility that Mr Reyes was shown footage of 15 December 2004, rather than 4 January 2005 - particularly in circumstances where that was what was sought in the notice to produce well before the hearing. But irrespective of which date was shown to Mr Reyes and which footage formed the basis for the warning, as the parties seemed to agree, the recording was not very enlightening of itself. It seems highly improbable that Mr Reyes would have remained employed by Bing Lee if the recording captured all that was described in the company's evidence. If Mr Reyes had been so recorded, his actions would have given the company reasonable grounds for summary dismissal rather than a warning notice.

31 More generally, there was no persuasive evidence to establish Mr Reyes was responsible for stock control concerning the stolen items. There was no evidence of a job description indicating he was responsible. Nor was there any evidence of him individually being given a general or specific responsibility concerning the missing stock. There were occasions when Mr Reyes had been delegated a supervisory role in relation to particular loads, but there was no evidence that anyone had put Mr Reyes in a supervisory role in relation to the stolen stock. Mr Reyes said that on days when he was not in charge, he attended to his own work and did not look at what other people were doing - which does not seem unreasonable. In contrast with the amorphous, multi-skilling stock control responsibilities that existed around the time of the thefts, with everyone helping in relation to stock control, Bing Lee now employs a person with dedicated stock control responsibilities. Further, the stock control procedures have been changed because, previously, the company could not identify who had checked-off a load.

32 I have not been satisfied Mr Reyes was the individual responsible for the stock control of the stolen items and nor have I been satisfied a proper basis has been made out for issuing the second warning for dereliction of duty on the basis of what was said to have been recorded by surveillance cameras.

33 As to the third notice, in view of the fact that the reporting requirements were imposed for legitimate occupational health and safety reasons, it was reasonable to expect Reyes should have reported the forklift vehicle incident. Indeed, if Mr Reyes had complied with the requirement to report the incident it is likely the extent of the damage (whether minor or more significant) could have been assessed contemporaneously. Had the required report been made, thereby allowing a timely damage/hazard inspection, the scope for disagreement would have been diminished about whether there was a mere scratch or, in the alternative, more significant structural damage that may have posed an occupational health and safety hazard.

34 In circumstances where Mr Naulty had introduced a policy of mandatory reporting for incidents and accidents, and that policy was known by Mr Reyes but disregarded by him, it was not unreasonable for the company to counsel or warn Mr Reyes for failing to report the incident. It is unnecessary to determine whether Mr Reyes was responsible for the extent of damage; the issue of relevance is that Mr Reyes had a collision with a structure while driving a forklift vehicle but did not report the matter, contrary to the mandatory reporting requirements.

Remedy 35 When the evidence as to the warnings that collectively formed the basis for dismissal is considered, I am satisfied the union has established a case that Mr Reyes was harshly, unreasonably and unjustly dismissed such as to warrant the Commission's discretionary intervention.

36 The union sought the remedy of reinstatement to the former position with lost remuneration pursuant to the application under s84 of the Act. The relief sought in the original dispute notification under s130 was not separately pressed by the union. The question of practicability of reinstatement was a live issue in the proceedings, given the impassioned evidence of Mr Lee on the subject of his antipathy to Mr Reyes. Mr Lee said he could not stand even looking at Mr Reyes, let alone having him work for Bing Lee once he knew Mr Reyes had dumped another retailer's advertising catalogues. Mr Lee was also of the view that staff morale would be adversely affected if Mr Reyes were reinstated, but there was no evidence as to what staff members themselves felt about that issue. Mr Lee was also resolutely of the view that Mr Reyes was not part of the "team", as he perceived Mr Reyes lacked the requisite level of commitment to the company. Mr Lee's views about the being part of the Bing Lee team were amplified in his evidence that unions should encourage employees to be friendly to employers and to be part of the team, rather than demanding more.

37 Mr Lee has great pride in his company and has strongly-held views about the Bing Lee team. He also has a settled personal aversion to Mr Reyes, stemming principally from the perceptions formed in relation to the catalogue issue. I have given careful consideration to Mr Lee's views when considering the practicability of reinstatement. There can be no doubting the sincerity of Mr Lee's personal views about Mr Reyes and what he expects of his "team", even if some of the some of his comments about Bing Lee team members seemed, with respect, somewhat idealised. I do not accept Mr Joseph's submissions that Mr Lee's attitude to Mr Reyes had no "rational" basis. Nonetheless, Mr Lee's responses about Mr Reyes, when considered in a comparatively dispassionate employment or industrial law context concerning an unfair dismissal claim, seemed somewhat disproportionate to what was actually established on the evidence adduced by the company in the proceedings.

38 On balance, but not without hesitation when Mr Lee's evidence is taken into account, I have been satisfied the union has established a case that Mr Reyes should be reinstated to his former position, with continuity of service. Generally, there would be no real cause for a storeperson and the chief executive officer of a large organisation to have much, if any, interaction at the workplace and Mr Lee's own evidence indicated he would not ordinarily have interaction with classes of employees such as Mr Reyes. Thus, the issue of impracticability diminishes in a real and practical sense given the ordinary working environment, notwithstanding the evidence of Mr Lee concerning his attitude to Mr Reyes.

39 As to the return to work, Mr Reyes did not dump any catalogues after his warning and that does not remain an outstanding issue requiring any further action. Obviously, Mr Reyes should be properly instructed in the new stock control procedures that have been introduced since his dismissal and be advised of the consequences of a failure to adhere to them. I do not consider there is any cause to disturb the warning in relation to reporting accidents and incidents. Mr Reyes should ensure he adheres to the mandatory reporting requirements upon his return to work.

40 In relation to lost remuneration, Mr Reyes has continued to work in a second, part-time job he held at the time of his dismissal by Bing Lee. Mr Reyes had asked his second employer for longer hours, but that request had not been accommodated at the time of the hearing. Mr Reyes said he had applied for other jobs to replace the Bing Lee position, but the evidence as to endeavours to find other jobs was not well developed. His endeavours to find alternative employment or extra hours have been unsuccessful, but I observe there are probably limited opportunities for a storeperson in his 40s whose first language is not English (Mr Reyes was assisted by an interpreter in Spanish). Mr Lee's normal weekly wage with Bing Lee was $525.73 and there was no evidence he had any income source apart from the second job he otherwise continued to hold. Given the union has established its case that Mr Reyes was harshly, unreasonably and unjustly dismissed, I consider there should be an order for lost remuneration in connection with the reinstatement. Mr Reyes has suffered financially as a result of the unfair dismissal and should receive some lost remuneration that he otherwise would have earned were it not for that dismissal. Equally, Mr Reyes, albeit for reasons directly attributable to the dismissal, has not actually performed any work for the company - but nor has he mitigated losses by finding alternative employment and, as noted earlier, any endeavours in that respect were not expanded in the evidence. Taking such matters into consideration, I consider the remuneration under s89(3) of the Act should be half the amount of wages Mr Reyes would, but for being dismissed, have received between the date of dismissal and the date of reinstatement, reduced by the payment in lieu of notice that was provided to Mr Reyes.

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