Nicola Horkan v Megaptera Pty Ltd trading as Aussie's Tavern Beenleigh - PR924639 [2002] AIRC 1394; (15 November 2002)

Workplace Relations Act 1996

s.170CE Application for relief re termination of employment

Megaptera Pty Ltd, trading as Aussie's Tavern Beenleigh

The following decision, now edited and amended, was given in transcript in Brisbane on 25 October 2002.

[1] The Commission has had the opportunity to consider the evidence and submissions in this matter. It arises out of an application under s.170CE of the Workplace Relations Act 1996 (the Act) by Miss Horkan (the applicant) on the grounds that the termination of her employment from Megaptera Pty Ltd, trading as Aussie's Tavern Beenleigh (the employer/respondent/Tavern), on 2 August 2002 was harsh, unjust or unreasonable. The applicant was employed as a casual bar and gaming attendant under the terms of The Hospitality Industry - Accommodation, Hotels, Resort and Gaming Award, 1998 [H0008]. The applicant was summarily dismissed.

[2] Correspondence from the employer of 8 August 2002 [exhibit B13] to the applicant set out the reason for termination, which was considered to be workplace harassment. It was also described during the hearing as bullying. The termination involved consultation with the applicant's union, the Australian Liquor, Hospitality and Miscellaneous Workers Union (the Union), following an extensive investigation by the respondent's human resources and industrial relations consultant (the consultant). The applicant rejected all complaints made against her. The applicant was involved in a number of incidents with at least three other employees, generally newer, quieter in nature, and junior to the applicant in seniority and position.

[3] Relationships between staff were apparently generally sound, with a good team spirit, until after the time of the armed robbery of the Tavern in February this year. That understandably dramatic incident has allegedly led, at least in part, to an increase in staff turnover. With some newer and less-experienced staff, there was a noticeable increase in tension between longer-term and shorter-term employees and employees, and their supervisors.

[4] The first behavioural incident with an employee and the applicant over abrupt, rude, aggressive and bullying behaviour led to a meeting and discussion between management and the applicant on 10 April 2002. A second meeting was held on 21 June about another behavioural incident involving complaints over the applicant's approach to other staff and work which led to her being issued a written warning dated 28 June. This warning made it clear that, unless the applicant made time to meet with management to discuss the issues concerned, further disciplinary action, including termination, could occur.

[5] Again on 23 July, there was a further meeting between management and the applicant over complaints from other employees. The applicant was suspended while an investigation by the consultant took place. Following the consultant's interviews with a number of employees, they provided statutory declarations to the employer. The fact that some three of them contained similar phrases, for example, "lack of tolerance", is not of any great significance, in the Commission's opinion. On 2 August, the applicant, consultant, and management met with the Union. The Union was allowed to peruse the statutory declarations in order to protect the names and addresses of those fellow employees who had completed them.

· the applicant was told if there were problems with customers, she was to call the manager and that she was not required to deal with such matters;

· the applicant yelled at staff, called one stupid, was rude to staff and a customer, would not listen to staff, was not either helpful, tolerant or approachable;

· the general atmosphere at work was still like "a family";

· the employer's consultant had given the applicant a number of opportunities to acknowledge problems, but she did not;

· the consultant read to the applicant details of the statutory declarations and the complaints contained therein in the presence of the Union organiser, and allowed the Union organiser to read them in full.

[7] The employer referred the Commission to the decision of the Full Bench of the Industrial Commission of South Australia in Bi-Lo Pty Ltd v Hooper [(1992) 53 IR 224 at 229]. In that decision, a number of elements are referred to by the Commission, which it held demonstrate, before dismissing the employee, that the employer satisfies its evidentiary onus with respect to the alleged misconduct if it:

(1) conducted as full and extensive investigation into all of the relevant matters surrounding the alleged misconduct as was reasonable in the circumstances;

(2) it gave the employee every reasonable opportunity and sufficient time to answer all allegations and respond thereto;

(3) having done those things, the employer honestly and genuinely believed, and had reasonable grounds for believing on the information available at that time, that the employee was guilty of the misconduct alleged;

(4) and that, taking into account any mitigating circumstances either associated with the misconduct or the employee's work record, such misconduct justified dismissal. A failure to satisfactorily establish any of those matters will probably render the dismissal harsh, unjust or unreasonable.

(1) With respect to the investigation, I have already indicated that the consultant carried out a reasonable, full and extensive investigation into all relevant matters.

(2) The applicant was given every reasonable opportunity and sufficient time to respond to allegations, but, while stating that she could do so, did not .

(3) The Commission is also satisfied with respect to this element that, having done these things, the employer honestly and genuinely believed it had reasonable grounds for believing, on the information available, the employee was guilty of misconduct.

(4) Fourthly, any mitigating circumstances: here, the employee continually failed to offer any explanation or in any way to indicate that there were problems. Such a failure made it difficult for the employer to provide a safe and healthy workplace and environment for other employees in order for it to meet both its statutory and common law obligations.

[9] With no preparedness by the applicant to acknowledge or respond to the need to alter her behaviour, the employer was left with few other disciplinary options than termination.

[10] Evidence for the applicant included that:

· there was a good working environment prior to a robbery which occurred in February 2002;

· security and staff turnover increased after the robbery, and morale dropped;

· the replacement of the relief duty manager caused some friction in the workplace;

· there were disagreements between employees, including swearing and raised voices; however, this did not include threats, intimidation, complaints or possible resignations generally, other than with respect to the applicant; and;

· the applicant preferred to praise staff rather than criticise.

[11] The applicant represented herself at the hearing of this matter and did so quite competently. The applicant does, however, demonstrate a certain doggedness and an attitude where she appears easily agitated. The evidence for the respondent was preferred for its consistency to that for the applicant. The Commission is of the opinion that the applicant, when speaking not only to fellow employees, but also to management, readily expressed her displeasure, disapproval, or anger, in a forceful and rather loud manner.

[12] There is sufficient evidence of intimidatory or aggressive behaviour to constitute misconduct which occurred in the form of bullying or harassment at a level that was unsatisfactory and excessive in all the circumstances. There is also evidence that the applicant was warned about this behaviour. Her overall conduct was not trivial. The applicant would not acknowledge any wrong-doing. This made it, as I stated earlier, very difficult for the employer, if not impossible, for alternative lesser disciplinary action to be taken. The respondent's investigation was, overall, adequate.

[13] In determining whether there was a valid reason for the applicant's termination, the Commission has considered "the totality of the relevant facts" ... ... "in the context both of the particular employment relationship and the employer's undertakings" [PR906309]. On balance, having considered all the evidence, submissions and the aforementioned matters, I am of the opinion the employer had a valid reason to terminate the applicant's employment based on her conduct and the operational requirements of the employer in accordance with s.170CG(3)(a) of the Act. This states, in part:

(3) In determining, for the purposes of the arbitration, whether a termination was harsh, unjust or unreasonable, the Commission must have regard to:

(a) whether there was a valid reason for the termination related to the capacity or conduct of the employee or to the operational requirements of the employer's undertaking, establishment or service; and

(b) whether the employee was notified of that reason; and

(c) whether the employee was given an opportunity to respond to any reason related to the capacity or conduct of the employee... ....

[14] Here the applicant was sent a letter of 8 August 2002 which advised her of the reason for termination.

[15] There were performance issues related to conduct and operational requirements of the business relevant to the applicant. They were put adequately to the applicant. The reason for her termination was, in the Commission's view, sound, defensible or well founded in accordance with the principles enunciated in Selvachandran v Peteron Plastics Pty Ltd [(1995) 62 IR 371]. Section 170CG(3)(c) deals with the issue of opportunity to respond. The applicant was given adequate opportunity to respond to concerns about the incidents and the complaints raised about her conduct, but chose not to. Section 170CG(3)(d), (da) and (db) state:

(d) if the termination related to unsatisfactory performance by the employee-whether the employee had been warned about that unsatisfactory performance before the termination; and

(da) the degree to which the size of the employer's undertaking, establishment or service would be likely to impact on the procedures followed in effecting the termination; and

(db) the degree to which the absence of dedicated human resource management specialists or expertise in the undertaking, establishment or service would be likely to impact on the procedures followed in effecting the termination; and

[16] Addressing those issues, subsection (3)(d) has already been addressed. Subsection (3)(da) is of some relevance as the employer's business is relatively small; however, the procedures followed were adequate. With respect to subsection (3)(db), the employer does not have its own human resource management specialists; however, it does have the consultant who provided advice and assistance to the employer, including carrying out the investigation of the complaints against the applicant procedurally satisfactorily.

(e) any other matters that the Commission considers relevant.

[18] The applicant was not given any notice or payment in lieu thereof, but was summarily dismissed. There was, in the Commission's opinion, no reasonable basis upon which to justify finding the applicant's conduct was so serious as to warrant termination of employment without notice. The applicant would not, in a practical and commonsense manner, have been treated fairly without such payments. The punishment should be proportionate to the gravity of the misconduct in respect to which the employee acted [Byrne v Australian Airlines (1995) 185 CLR 410 at 465]. The applicant's overall actions constituted misconduct with evidence of it likely re-occurring [Bryant v City of Fairfield RSL Memorial Club, N13608 of 1995, 16.12.1997]. Nevertheless, the behaviour was not conceded.

[19] The applicant did not seek reinstatement at the hearing, but compensation. This was opposed by the respondent. The applicant tarnished, to a degree, the level of trust and confidence essential in the employer/employee relationship, [Blyth Chemicals Limited v Bushnell [1933] HCA 8; (1933) 49 CLR 66]. The nature of her conduct was ill-considered.

[20] Although I have found there was a valid reason for the applicant's termination of employment, it does not follow from this that the termination was not harsh, unjust or unreasonable. In Windsor Smith [Print Q3462] at page 7 the Full Bench stated:

Whether there was a valid reason for the termination is only one of four separately specified matters which the Commission must now have regard to. The commission must also have regard to any other matter it considers relevant. there is no causal connection between a finding that there was no valid reason for the termination and a conclusion that the termination was harsh, unjust or unreasonable.

[21] And in _Mullins v Wideform Constructions [__PR902162]_another Full Bench said in paragraph 14:

... it is clear that a finding that there is a valid reason for termination based on the operational requirements of an employer's business will not be determinative of whether the termination of an individual's employment is harsh, unjust or unreasonable... Furthermore, whether there was a valid reason for the termination is only one of the matters specified in s.170CG(3) as being matters that the Commission `must have regard to' in determining whether a termination was harsh, unjust or unreasonable.

[22] Having had regard to the matters in s.170CG(3) of the Act, the evidence and circumstances of the case, and in the interests of justice, the termination of the applicant's employment was, in the Commission's opinion, harsh, unjust or unreasonable. Accordingly, I turn to the matter of a remedy. As previously stated, the applicant did not seek reinstatement in her position. Further, evidence for the employer included that it would be very difficult for a number of employees to work with the applicant.

[23] I now turn to whether I should make an order providing for a remedy, and, if so, what remedy that I should order. The relevant statutory provision is s.170CH of the Act which states, in part:

(1) Subject to this section, the Commission may, on completion of the arbitration, make an order that provides for a remedy of a kind referred to in subsection (3), (4) or (6) if it has determined that the termination was harsh, unjust or unreasonable.

(2) The Commission must not make an order under subsection (1) unless the Commission is satisfied, having regard to all the circumstances of the case including:_

(a) the effect of the order on the viability of the employer's undertaking, establishment or service; and

(b) the length of the employee's service with the employer; and

(c) the remuneration that the employee would have received, or would have been likely to receive, if the employee's employment had not been terminated; and

(d) the efforts of the employee (if any) to mitigate the loss suffered by the employee as a result of the termination; and

(e) any other matter that the Commission considers relevant; that the remedy ordered is appropriate.......

_(6) If the Commission thinks that the reinstatement of the employee is inappropriate, the Commission may, if the Commission considers it appropriate in all the circumstances of the case, make an order requiring the employer to pay the employee an amount ordered by the Commission in lieu of reinstatement.

(7) Subject to subsection (8), in determining an amount for the purposes of an order under subsection (6), the Commission must have regard to all the circumstances of the case including:_

(a) the effect of the order on the viability of the employer's undertaking, establishment or service; and

(b) the length of the employee's service with the employer; and

(c) the remuneration that the employee would have received, or would have been likely to receive, if the employee's employment had not been terminated; and

(d) the efforts of the employee (if any) to mitigate the loss suffered by the employee as a result of the termination; and

(e) any other matter that the Commission considers relevant.

[24] An order under s.170CH is to provide a remedy following a determination that the termination was harsh, unjust or unreasonable. In the circumstances, the termination has been found to be harsh, unjust or unreasonable. It is, in my view, appropriate to make an order under s.170CH providing a remedy for this harshness, injustice or unreasonableness.

[25] In accordance with s.170CH(2) of the Act, the Commission is satisfied, having regard to all of the circumstances of the case, that:

**(**a) there were no submissions from the employer about the issue of viability;

(b) the employee's service was just under two years;

(c) submissions from the parties addressed this issue;

(d) the applicant sought, and gained, alternative casual employment and did therefore act to mitigate her losses. However, that employment was for a lesser number of hours and was achieved within a few weeks of termination;

[26] The Commission has, nevertheless, considered the requirements of s.170CH(2) in determining an appropriate remedy. The Commission considers that, on fine balance, it is appropriate to compensate the applicant. The Commission finds that the applicant could not appropriately be reinstated; nor in fact did she seek it [s.170CH(6)].

(7) Subject to subsection (8), in determining an amount for the purposes of an order under subsection (6), the Commission must have regard to all the circumstances of the case including:_

(a) the effect of the order on the viability of the employer's undertaking, establishment or service; and

(b) the length of the employee's service with the employer; and

(c) the remuneration that the employee would have received, or would have been likely to receive, if the employee's employment had not been terminated; and

(d) the efforts of the employee (if any) to mitigate the loss suffered by the employee as a result of the termination; and

(e) any other matter that the Commission considers relevant.

[28] With respect to (a) viability, there were no submissions; (b) the length of service was just under two years; and (c) the remuneration the employee would have received or would have likely to have received had she not been terminated - even though the respondent had conduct issues with the applicant, in the Commission's opinion, as these conduct issues were likely to be repeated within a short time, the applicant's further period of service is assessed at four weeks; (d) the applicant has successfully obtained alternative employment within a few weeks, but for lesser hours; (e) the appropriate warning or counselling procedures were followed, in the Commission's opinion.

[29] This assessment of further service is the first step in accordance with the Full Bench principles in Spriggs v Paul's Licensed Festival Supermarket [(1998) 88 IR 21_]_ and Ellawalla v Australian Postal Corporation [Print S5109], which are relevant.

[30] The next step is to deduct moneys earned since termination. Some of the relevant material with respect to earnings was addressed in submissions with respect to Windaroo (from 6 September 2002, 15 hours per week) or have been supplied to the parties this morning, with respect to earnings from the Park Ridge Tavern, where the applicant since approximately 27 September 2002 has now averaged about 30 hours per week. The calculations can be addressed by the parties.

[31] The Commission has deducted 25 per cent for the contingencies of the uncertainty of the earlier assessment of four weeks and as the moneys are to be paid as lump sum. Financial and other costs of the termination to the applicant have been incurred and noted by the Commission. The amount established by applying the aforementioned steps is under the legislative cap. I will require the parties to confer in order to do the precise calculations of the amount to be paid to the applicant. If difficulties arise with respect to the calculations, the Commission can be advised, and it will determine the amount.

[32] The Commission would observe that summary dismissal is ordinarily justified by repudiation of the employment contract. Bullying or harassment alone, while becoming ever more serious and less acceptable by today's community standards, may generally constitute grounds for dismissal with notice or perhaps more appropriately payment in lieu thereof. It may however alone, not constitute a repudiation to the extent to warrant or justify summary dismissal.

[33] With respect to the applicant, there has been a number of incidents or history of inappropriate behaviour and conduct particularly with respect to the newer or more junior employees. The Commission is satisfied that an appropriate warning and opportunities had been given and discussions held over several months with respect to conduct issues. Verbal abuse should be treated seriously by employers. However, the use of somewhat colourful or robust language in taverns may be somewhat unremarkable. The nature of the work environment is a relevant consideration, in the Commission's opinion, when considering today's more modern workplaces. Altercations between employees and between employees and supervisors/management are obviously not uncommon. The applicant's behaviour, however, in the Commission's opinion was inappropriate.

[34] Disciplinary intervention, however, was clearly appropriate. Termination with notice or, as I indicated, more appropriately payment in lieu, was warranted due to misconduct, but the misconduct was not of such a serious nature that it justified instant dismissal with the action that was taken. The power to dismiss summarily is a special right not to be used except in particular circumstances. While the Commission accepts the employer's submission that it has a duty of care to provide a safe and healthy workplace, to afford both parties a fair go all round in accordance with s.170CA(2) of the Act, the Commission has determined as stated earlier, having considered all the evidence and submissions, the circumstances of the case, and in the interests of justice, that the applicant's behaviour was misconduct warranting termination with reasonable notice, similar to if the applicant had been a full or part time employee.

[35] It was not sufficient to summarily dismiss the applicant. The calculation of moneys owing shall be settled by the parties within the next seven days of the date of the written decision, and, on that basis, payment of moneys owing to the applicant is to be made within 10 days thereafter.

Mr T Bradley of Counsel, instructed by McCullough Robertson, appeared for the respondent.

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