Is reinstatement practicable and appropriate?
6 Sub-sections 170EE(1) and (2) of the Act provided;
"(1) In respect of a contravention of a provision of this Division (other than section 170DB or 170DD) constituted by the termination of employment of an employee, the Court may, if the Court considers it appropriate in all the circumstances of the case, make the following orders:
(a) an order requiring the employer to reinstate the employee by:
(i) reappointing the employee to the position in which the employee was employed immediately before the termination; or
(ii) appointing the employee to another position on terms and conditions no less favourable than those on which the employee was employed immediately before the termination; and
(b) if the Court makes an order under paragraph (a):
(i) any order that it thinks necessary to maintain the continuity of the employee's employment; and
(ii) an order requiring the employer to pay to the employee the remuneration lost by the employee because of the termination.
(2) If the Court thinks, in respect of a contravention of a provision of this Division (other than section 170DB or 170DD) constituted by the termination of employment of an employee, that the reinstatement of the employee is impracticable, the Court may, if the Court considers it appropriate in all the circumstances of the case, make an order requiring the employer to pay to the employee compensation of such amount as the Court thinks appropriate."
7 There is a considerable body of judicial exegesis in respect of the words "impracticable" and "appropriate" in those sub-sections. In Patterson v Newcrest Mining Ltd (1996) 68 IR 419, Wilcox CJ said, at 420-421;
"The word "impracticable" has caused difficulty in relation to unlawful termination claims. It appears in subs (2) and has led judges of the Court, including myself, to describe the scheme of s 1709EE as one providing a primary remedy of reinstatement and a secondary remedy of compensation where reinstatement is impracticable. These comments must be read in the light of the amendments, where they apply, requiring the Court to reach a determination that it is "appropriate in all the circumstances of the case" to order reinstatement. Contrary to the submission put by counsel for the appellant, it is my opinion that the matter of appropriateness, where that concept applies, is not restricted to the form of a reinstatement but applies to the initial question whether reinstatement shall be ordered or not.
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I am content to adhere to what I said in Nicolson v Heaven and Earth Gallery Pty Ltd (1994) 57 IR 50 at 60. I do not think that what I there said is inconsistent with what Keely J and I said in Liddell v Lembke (1994) 56 IR 447 at 465. The requirement to consider the impracticability of reinstatement necessarily requires the Court to have regard to all the relevant circumstances of the case relating to the employer and the employee; as I said in Nicolson, to evaluate the practicability of a reinstatement order in a commonsense way."
8 In Liddell v Lembke (1994) 56 IR 447, Wilcox CJ and Keely J observed, at 465;
"It is true that s.170EE uses the word "may", not "shall", and that "may" connotes the conferral of a discretion, not a duty: see s.33(2A) of the ActsInterpretation Act 1901. However, as the Industrial Relations Act does not specify any criteria for the exercise of that discretion, they are those emerging from "the subject matter and the scope and purpose" of the legislation: see The Queen v Australian Broadcasting Tribunal; Ex parte 2HD Pty Limited (1979) 144 CLR 45 at 49. The subject matter of this legislation is unlawful termination of employment. Its scope and purpose is the provision of legally enforceable remedies for people whose employment is terminated in breach of the internationally-accepted standards introduced by the Act into Australian domestic law. Because of these considerations, and the fact that the Commonwealth Act makes a termination in violation of the requirements of s.170DC unlawful in itself, whatever the employee's merits or lack of them, it would not be right to withhold a remedy for a breach of s.170DC because of considerations listed in s.170DE(1). They are factors that permit an employer acting fairly to terminate an employee's employment. Still less would it be correct for the Court to exercise its discretion adversely to an applicant because of factors extraneous to the Industrial Relations Act, such as a respondent's financial position or personal likes or dislikes."
9 In opposition to an order for reinstatement, evidence was adduced on behalf of the Bank from its Senior Manager, Human Resources, for Victoria and Tasmania, Mr Wade. He testified to the self-obvious fact that banking requires of those who participate in it very high standards of integrity and honesty. He indicated that the Bank had lost confidence in the applicant's ability to attain and adhere to those standards. As explained in the earlier reasons, I have found that the allegations of implication in the theft from the ATM which could be regarded as the primary foundation for the Bank's loss of confidence in the applicant, have not been made out. However, Mr Wade pointed to the applicant's allegedly untruthful contention that he had provided Ms Clare and Mr Forkgen with Ms Blencowe's pay envelopes from Franklins and to his refusal to furnish a response to the Bank's request of 24 June 1996 as separately founding the Bank's loss of confidence in the applicant.
10 Mr Wade also testified that the applicant's previous position no longer exists and that the duties and responsibilities of positions broadly equivalent to it have changed dramatically in the period since the applicant's dismissal. He acknowledged that there are recurring vacancies in those equivalent positions and conceded that, with some bridging training, the applicant could fill one of those vacancies. However, he reiterated that the scope for appointing the applicant to any such vacancy was severely restricted by the Bank's reluctance to allow the applicant access to cash or clients' accounts. Continuous direct supervision of the applicant, he pointed out, was not practicable.
11 In my view, the circumstances of this case attract the application of the principles enunciated by a Full Court of IRCA in Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186, where it was observed, at 191;
"Trust and confidence is a necessary ingredient in any employment relationship. That is why the law imports into employment contracts an implied promise by the employer not to damage or destroy the relationship of trust and confidence between the parties, without reasonable cause: see Burazin v Blacktown City Guardian Pty Limited (Wilcox CJ, von Doussa and Marshall JJ, [(1997) 142 ALR 144]. The implication is not confined to employers, it extends to employees: see for example Blyth Chemicals Ltd v Bushell (1933) 49 CLR 66 at 81-2 and North v Television Corporation Ltd (1976) 11 ALR 599 at 609. So we accept that the question whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is impracticable, provided that such loss of trust and confidence is soundly and rationally based.
At the same time, it must be recognised that, where an employer, or a senior officer of an employer, accuses an employee of wrongdoing justifying the summary termination of the employee's employment, the accuser will often be reluctant to shift from the view that such wrongdoing has occurred, irrespective of the Court's finding on that question in the resolution of an application under Division 3 of Part VIA of the Act.
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 that 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."
12 In respect of the Bank's reliance on the applicant's allegedly untruthful assertions that he had furnished Ms Blencowe's pay envelopes to Ms Clare and Mr Forkgen on 13 June 1996, it is to be remembered that in [81] of the previous reasons, I indicated an inability to resolve that issue one way or the other. As well, it was implied that, even if its version were accepted, it would still have been incumbent on the Bank to have made its own investigations into whether the suggestion that Ms Blencowe's wages had been the source of the payment of $250 into the applicant's account on 29 April.
13 Insofar as the Bank relied, as destructive of the requisite relation of trust and confidence, on the applicant's refusal to respond to its request of 24 June 1996 for information to resolve its concerns about his possible implication in the theft, I refer to what I said at [97] of the previous reasons. I there observed;
"The reasonableness of that refusal has to be assessed in the light of the level of co-operation which the applicant had previously extended to the Bank's investigators, the readiness with which he had responded to those earlier requests for information and the terms in which the request of 24 June was cast. In my view, it is understandable, in all the circumstances, that the applicant acted on the advice, which I infer he received from his then solicitors, to answer no further questions. The Bank's letter to the applicant of 24 June was prefaced with an intimation that a decision had been made to conclude the Bank's own investigation, finalise the investigator's findings and recommendations, and return the file to investigating police at the Fitzroy CIB. When those prefatory remarks are read in conjunction with the accusatory tone of many of the subsequent paragraphs which imply that the applicant's earlier responses had been inconsistent or unsatisfactory, the questions as a whole in the letter of 24 June cannot be regarded as reasonable or fair. Some propositions which were said to indicate specific inconsistencies like that to the effect that no call had been made to Mr Patty's home by the VRU or help desk on the morning of 11 February were, I have found, almost certainly wrong. Other specific parts of the request taxed the applicant with having made responses the "relevance of which was doubted by the Bank". Understandably therefore, Counsel for the Bank conceded on the hearing of the review (transcript p 670) that "a number of these questions could have been formulated in a better fashion". It was therefore not unreasonable for the applicant to decline to take the risk by another response of creating further inconsistency which the police might regard as sustaining criminal charges. The interpretation was also open that the applicant was no longer being asked to provide information to assist the Bank's investigators in continuing inquiries, but rather was being given a last opportunity to rebut their provisional inculpatory conclusions."
14 That reasoning entails that, if reviewed with the average, fair-mindedness imputed to a reasonable employer by the Full Court in the last paragraph of the extract from Perkins v Grace Worldwide quoted above, Mr Patty's refusal to respond to the letter of 24 June 1996, either alone or in combination with the claim about Ms Blencowe's pay envelopes, if that was, in fact mistaken or untruthful, would not be regarded as destructive of the requisite trust and confidence.
15 It follows from the conclusions reached in the earlier reasons that I cannot regard the Bank's loss of trust and confidence in the applicant as soundly and rationally based insofar as it is founded on the suspicion that Mr Patty had been implicated in the theft from the ATM. This is a case, I consider, where the Bank has been reluctant to shift from the view that the wrongdoing which it imputed to the applicant has occurred, notwithstanding the finding on that question expressed in the earlier reasons. Accordingly, were I to regard that reluctance as destructive of the requisite trust and confidence, the applicant would, as the Full Court pointed out in the passage just quoted from Perkins v Grace Worldwide, be denied access to the primary remedy provided by the legislation. I am not persuaded, having regard to the circumstances as a whole, that it is impracticable for the Bank to re-employ Mr Patty in a position broadly equivalent to that which he occupied immediately before he was dismissed.
16 Notwithstanding the opinion just indicated that the reinstatement of the applicant is not impracticable, the question is left open by s 170EE of the Act whether the Court considers it appropriate, in all the circumstances of the case, to make an order requiring the Bank to reinstate the applicant. That question turns, as indicated in Liddell v Lembke (supra), on the exercise of a general discretion circumscribed only by the subject matter and scope and purpose of the legislation. The only consideration pointed to by Counsel for the Bank, in addition to the matters said to have destroyed the relation of trust and confidence, is the applicant's delay at various stages in prosecuting his claim for the remedy of reinstatement. It is true that a great deal of time has been wasted in the taking of interlocutory steps before and after the Judicial Registrar's decision and in attempts, which for reasons explained below have proved unavailing, to invoke the Court's accrued or associated jurisdiction. However, when regard is had to the size of the Bank's workforce, its conceded ability to re-employ the applicant after the lapse of time which has occurred and the absence of any identifiable present or prospective other employee who would be prejudiced by the reinstatement, that part of the delay attributable to the applicant or his advisors does not preclude the grant of the primary remedy. As explained below, that is not to say that delay may not be a factor in conjunction with others, to be taken into account in moulding the consequential relief contemplated by s 170EE(1)(b).