Byrne, G.A. v Australian Airlines Ltd

Re: GEORGE ALBERT BYRNE and GEORGE MORTIMER FREW
And: AUSTRALIAN AIRLINES LIMITED
Nos. N I2 of 1991 and N I4 of 1990
FED No. 373
Inudstrial Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Hill J.(1)

CATCHWORDS

Industrial Law - Commonwealth - Industrial Relations Act 1988 - Transport Workers (Airlines) Award 1988 - whether dismissal "harsh, unjust or unconscionable" - effect of employer's failure to conduct own investigation - effect of delay in informing employee of suspicion of misconduct.

Damages - General Principles - Breach of employment contract - unlawful dismissal - whether discount to be made for possibility of later lawful dismissal - whether deduction to be made for income tax.

Industrial Relations Act 1988 (Cth): ss.178, 347

Transport Workers (Airlines) Award 1988: cl.11(a)

Gregory v Philip Morris Ltd (1988) 80 ALR 455

Bostick (Australia) Pty Ltd v Grogevski (Full Court of the Federal Court, 14 May 1992, unreported)

British Home Stores Ltd v Burchell (1978) IRLR 379

Wheeler v Philip Morris Ltd (1989) 97 ALR 282

Lane v Arrowcrest Group Pty Ltd (1990) 99 ALR 45

Thompson v Hodder (1989) 21 FCR 467

HEARING

SYDNEY

#DATE 4:6:1992

Counsel and Solicitors P. Hall QC with B.D. Hodgkinson
for Applicant: instructed by Carroll and O'Dea

Counsel and Solicitors R. Burbidge QC with F. Parry
for Respondent: instructed by Freehill Hollingdale and Page

ORDER

THE COURT ORDERS THAT:

1. The application of each applicant is dismissed.

2. No order as to costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

The applicants in each of the present matters ordered to be heard together, Mr George Byrne and Mr George Frew, seek the imposition of a penalty pursuant to the provisions of s.178 of the Industrial Relations Act 1988 (Cth) ("the Act") arising from their respective dismissals from the employment of the respondent, Australian Airlines Limited ("the Airline"). They seek, in addition, damages. They claim that the summary termination of their employment was, within the meaning of cl 11(a) of the Transport Workers (Airlines) Award 1988 ("the Award") harsh, unjust or unreasonable and hence in breach of the Award.

The jurisdiction of the court to impose a pecuniary penalty for breach of an award is attracted by virtue of s.178(1) of the Act (see the definition of "Court" in s.4(1)). It is not in dispute that the applicants have standing to sue for, and recover a penalty for, breach of the award (see s.178(5)(ca)). The claim for damages arises under the court's accrued or pendant jurisdiction.
It is conceded further that the Airline is a person to whom the provisions of the award applies.
The background to the dismissal
The background to the event which led to the dismissal of the applicants is not seriously in dispute.
Thefts from passenger baggage had been a significant problem for airlines operating at Sydney airport for many years. Despite attempts to gather evidence of thefts, it had proved extremely difficult to obtain such evidence. The number of customer complaints had escalated over the years and in 1989 there had been hundreds of complaints. In many instances bags had been slashed with razor blades or knives, zippers had been broken, locks had been damaged and in some instances items such as perfume had been broken in bags causing damage to clothing. One estimate of the damage occasioned at Sydney airport put the damages at hundreds of thousands of dollars.
Morale, as at January 1987, was not high among the employees of the Airline as a result of the prevalence of baggage pilfering. According to the evidence of Mr Davies who commenced employment with the Airline at that time, security was lax, it was perceived that security officers and honest porters had been intimidated and there was a general perception that nobody was to report anything, nobody was to see anything and it was best if nobody did anything about it. Conversely, there were a lot of honest employees. The Airline's reputation was being affected by the incidence of theft from passenger baggage, its image with tourists and the general public was suffering and this, in turn, further affected staff morale.
Baggage on particular flights was targeted. A popular target was the flight to and from Coolangatta, a holiday destination. Apparently it was perceived by those involved in the pilfering that tourists were likely to have valuable items in their luggage. Items commonly stolen included cameras, personal effects, money, jewellery, clothing such as leather jackets, suits, leather goods, children's toys, ex-servicemen's medals and decorations and children's moneyboxes. Many thefts probably went unreported, the victim being uncertain where the loss had occurred.
Attempts by security officers to detect occurrences of theft were on some occasions made difficult by complaints by porters of intimidation and harassment. Porters walked off the job and were apparently supported by their union delegates. Management, to avoid an industrial dispute, so the evidence of employees of the Airline indicated, was forced to withdraw the security officers.
In January 1988, Mr Davies, who at that time was employed by the Airline as its security manager for New South Wales and the Australian Capital Territory, was approached by the Australian Federal Police seeking cooperation in an on-going investigation into theft from baggage carried by the Airline. The investigation became known as "Operation Peacock". A similar investigation was carried out at Melbourne airport. The Sydney investigation had included collating information obtained from informants to see if there was some correlation between occasions of loss and particular porters whose responsibility it was to load and unload aircraft. Mr Davies had been undertaking a similar study and had developed a computer programme to carry out a statistical analysis. He supplied the results of his study to the police. It is not suggested that these inquiries revealed any involvement of either Mr Byrne or Mr Frew.
Mr Byrne and Mr Frew had been working as drivers of what is known as a Cochrane and Weston Cargomaster machine, a device which lifts cargo and baggage to the door of the cargo hold on aircraft. They did, however, help out with manual loading as the occasion required, usually on the morning shift.
Mr Hunt-Sharman, who at that time was a Detective Constable with the Australian Federal Police assisting the investigation, deposed to the difficulties of obtaining evidence of interference with passenger baggage occurring in the hold of an aircraft. He said that there was virtually no visibility into the hold from outside an aircraft unless the observer was standing close to the doorway. The view into a hold can be easily obscured by the porters during the loading and unloading cycle. Porters standing immediately outside the hold could act as "cockatoos" if anyone approached. Even if a porter were spotted with an open bag, it could be difficult to disprove an explanation of the porter that the bag had accidentally come open during handling and was being repacked.
In view of the difficulty of obtaining evidence by conventional means, consideration was given in discussions between the police and the Airline to installing secretly concealed video cameras in the holds of aircraft and other locations in the airport such as porters' locker rooms. The police, however, did not pursue this.
An incident occurred in July 1988 when aircrew and flight attendants observed a porter going through passenger baggage at Sydney airport. Apparently an emergency periscope had been erected, located in the passenger cabin, which provided a view of the forward aircraft hold. The porter involved had been summarily dismissed.
Subsequently, viewing lenses erected in the holds of various aircraft were covered up by porters or obscured and in one instance a viewing lens was smashed. In or about September 1988 a decision was made by senior management of the Airline, it would seem on the recommendation of Mr Davies, to install surveillance cameras in the holds of various aircraft. One such camera was installed in the hold of a Boeing 727 aircraft scheduled as Flight TN2 to Adelaide and Perth from Sydney on 11 October 1988. The video camera was located on the middle of the wall of locker 4, (that is to say at the rear of the locker facing forward and pointed towards locker 3). The recording unit was activated at about 8.00am and deactivated at about 8.25am. The plane was scheduled to depart Sydney at about 8.35am. On that day a team of four porters was allocated to load and unload manually luggage from lockers 3 and 4. The four men involved were the applicants, Mr Brosnan and a Mr Harvey. Messrs Byrne and Brosnan commonly worked together as a team. Mr Frew did not work regularly with either on manual unloading, although he often worked with Mr Harvey as a team driving the Cochrane and Weston machines.
Before turning to the video, it is necessary to describe the location of lockers 3 and 4 on the aircraft. In so doing, I should note that while I initially declined the invitation of the parties to view the lockers and to see, at first hand, the loading and unloading of a similar aircraft, I did ultimately hold a viewing, as there seemed some disagreement between the witnesses as to the visibility of what was occurring in locker 3 from the point of view of a person handing up luggage, a dispute readily resolved by a view.
A Boeing 727 series 200 aircraft has four lockers for passenger baggage, freight and mail. Lockers 1 and 2, situated at the front of the plane, have only one doorway providing access to both lockers. Lockers 3 and 4 are at the rear of the plane. They are divided only by removable material which witnesses described as webbing. Despite the description, it was opaque. Each of these lockers has a doorway on the right-hand side of the plane (when facing forward); these doorways are towards the front of the respective lockers. The floor of lockers 3 and 4 is continuous. The side walls are vertical but at each side they slope inwards following the curvature of the aircraft fuselage. The lockers are situated underneath the passenger cabin of the plane. The bulkhead at the rear of locker 4 and that at the front of locker 3 is vertical. A pole, situated mid-way between the side walls, runs between the floor and ceiling just forward of the locker 4 door. The webbing which divides the lockers is attached to the pole, ceiling and side walls by straps which leave a gap of approximately 6 inches around the perimeter.
Locker 3, the larger of the two lockers, is about 15 feet long whilst locker 4 is about 7 feet long. The floor of the lockers is about 6 feet wide. The height from the floor to the ceiling is approximately 5 feet, but the floor tapers up towards the back of locker 4. The doorway to locker 3 is approximately 4 feet 6 inches high and the same distance wide. The doorway to locker 4 is approximately 3 feet high and 4 feet wide. The bottom of the doorway to locker 3 is about 5 feet above the tarmac; that to locker 4 is slightly higher, approximately 5 feet 6 inches above the tarmac. When there is little luggage to load, and one may assume when that luggage is light (this was the case on the day the view took place), porters stand on the tarmac and throw the luggage up to the porter stacking the luggage in the hold. On other occasions, porters may stand on a luggage trolley to gain height. These trolleys have a base which is almost 2 feet from the tarmac. The bottom of the door of locker 4 thus is only about 3 feet 6 inches above the base of the trolley and comes more or less up to the waist of a porter of average height standing on the trolley.
Subject to the extent to which the webbing might obscure vision, a porter standing on a trolley loading locker 4 would have little difficulty seeing inside both lockers 3 and 4. Incidentally, standing on the tarmac at the doorway to locker 4, it is possible to see clearly into locker 3, even with the webbing in place, because there is vision underneath that material looking upwards through the gap left by the straps. Thus a porter loading locker 4, but standing on the tarmac, could, if he so desired, see relatively clearly what was taking place in locker 3.
Flight TN2, a daily flight, is normally a busy flight. Luggage is usually placed at the terminal on trolleys which separate out the luggage travelling to Perth from that travelling to Adelaide. The luggage for Perth is stacked in locker 3, that for Adelaide in locker 4. If there were little luggage it would be possible that only one trolley would be used on which luggage for both Perth and Adelaide was placed. When luggage is presented by passengers it is tagged with a label, upon which are letters indicating the destination (eg "PER", "ADL"). The labels are also colour-coded, so that it is possible to tell at a glance the intended destination of each piece of baggage.
There will usually be at least one trolley used for each of lockers 3 and 4, and sometimes up to three or four for locker 3. Usually one trolley suffices to fill locker 4. Where, as on the day in question, two teams are operating, there will usually be one person at the trolley outside the door to locker 4 handing in the baggage, cargo or mail and the other inside locker 4, receiving and stowing the baggage. The other two members of the team of 4 porters will usually do the same for locker 3. When locker 4 is loaded, the two porters from it will usually give the others a hand to finish loading locker 3. If there is sufficient space in locker 4, this might be done by loading the nearmost section of locker 3 through the doorway for locker 4. It is not known what quantity of luggage was required to be loaded on 11 October 1988.
The video
Three versions of the video are in evidence. The first includes a segment of 15 minutes showing the unloading of baggage from the aircraft, as well as the process of loading baggage destined for Adelaide and Perth. The second and third videos are confined to that part of the first video concerned with loading. The second is in slow motion with enhanced sound. The third shows a reverse image of the first video, not in slow motion, thus recording the scene in its actual orientation, rather than the mirrored image actually recorded. It also displays a digital read out of time elapsed.
At the start of the unloading operation the webbing is fastened at the point dividing lockers 3 and 4 to the pole. Mr Brosnan can be seen in locker 3 bending down. He approaches the webbing and undoes that part of it which is on the left of the plane. Mr Byrne, who was also in locker 3, comes forward and takes up position in locker 4. Prior to his so doing, a voice can be heard saying:

"As soon as I saw you blokes out here I knew that it had to be flight 2."

At that point of time both Mr Byrne, who is in locker 4, and Mr Brosnan are visible. There are some words which to me are inaudible, although according to Mr Hunt-Sharman they appear to be Mr Byrne saying to Mr Brosnan:

"I'll stack and you look after it."

A suitcase is then handed through the locker door to Mr Brosnan and at the same time Mr Brosnan calls out to the person standing below, clearly Mr Frew:

"George, give us that Perth one."

Mr Brosnan then places the suitcase in locker 3 parallel to the webbing and about 2 feet 6 inches or 3 feet forward of the webbing. A smallish bag with two handles (presumably the "Perth one") is then handed up and Mr Brosnan places it between the webbing and the suitcase. There are, as already indicated, gaps of up to about 6 inches between the webbing and the pole, where the webbing is secured by what look like straps to the pole. Mr Byrne is sitting about 2 feet away from Mr Brosnan apparently waiting for luggage to be given to him to load. The second bag is placed in position at approximately 50.10 seconds on the timer. Mr Brosnan can be then seen bent over the bag for approximately 24 seconds. While this is occurring, Mr Byrne calls out to Mr Frew for "a couple of small ones". There are handed up a bag and a case. Both are loaded normally in locker 4. Mr Brosnan moves the bag, over which he has been bending, closer to the webbing and then can be seen crouched over what appears to be another bag for about 43 seconds. Two small bags are thrown up to Mr Byrne who moves them in the direction of locker 3 and continues to load other cases. Mr Brosnan then passes the bag which has been occupying his attention out to the porter outside the aircraft, without comment and takes the next soft bag, it could be a haversack, behind the webbing. He can be seen bent over this bag for something over 37 seconds, from time to time obscured by Mr Byrne who is stacking bags, at times in front of the camera. Just after the 37 second mark, Mr Brosnan reaches into the back pocket of his shorts, takes, one may assume, something out and then returns to the case. He can then be seen bent over the case again, his right arm moving in a motion consistent with the turning of a key back and forth. This occupies another half a minute. He then returns to the door of the locker and throws the bag down to Mr Frew. In the meantime, Mr Byrne has thrown another soft bag, probably a haversack, behind him, consistent at least with Mr Byrne intending it for Mr Brosnan. Mr Brosnan takes this and two other small bags behind the webbing. The video becomes wholly obscured at the end of 3 minutes and approximately 30 seconds. Apart from throwing Mr Brosnan the bags, Mr Byrne throughout can be seen loading luggage normally.
The events between October 1988 and 28 March 1989
The video was sent to Melbourne to be examined. It remained in Melbourne (there is no explanation why) until it was returned to Sydney on or around 24 January 1989. In the meantime, in January 1989 the Transport Workers Union became aware that cameras were being used in the holds of aircraft. A letter was written by Mr Davies on 20 January 1989 advising that this was so. That letter followed a discussion between management and the Union.
On 24 January, Mr Davies, who had had the tape collected from Melbourne and brought to Sydney, handed the tape (among others, it would seem) to Constable Hunt-Sharman at a meeting at which were present other representatives of the Airline, including Mr Hazell, the then Assistant Security Manager for NSW and the ACT, and other representatives of the police. Copies of the tapes so handed over were made and the originals handed back for safe keeping. At a meeting the next day, the figures appearing on the tape were identified for the police and a conference was held as to whether what appeared on the tape was normal working procedure.
According to his evidence, Mr Anderson, then New South Wales State Manager, viewed the video some time in February 1989 at the offices of the Australian Federal Police in Goulburn Street, Sydney. He said that he had formed the view that what he had seen on the video was Mr Brosnan rifling passenger baggage for items which he could steal. He concluded that Mr Byrne must have been aware of what Mr Brosnan was doing having regard to the close proximity within which the two were working. Further, he concluded that Mr Byrne was directly assisting Mr Brosnan from the way Mr Byrne had placed a bag conveniently near to Mr Brosnan. He formed the view that Mr Frew was also aware of Mr Brosnan's activities. In so doing, he identified Mr Frew from the reference to "George" on the sound track of the video. He said in an affidavit filed in the proceedings:

"I was satisfied that Frew responded to that request by handing up an item of passenger baggage to Brosnan and received that item of passenger baggage from Brosnan out of the hold when Brosnan had finished with it. He also received back out of the hold other luggage after Brosnan had finished his activities... I thought he was directly involved in the stealing from passengers' luggage."

Accordingly, Mr Anderson said that he formed the view that the conduct of each of Mr Brosnan, Mr Byrne and Mr Frew was such that it justified instant dismissal unless each could offer an innocent explanation of his conduct and explain what he was doing consistent with proper normal loading operations.
Mr Anderson was challenged in cross-examination as to whether he had not seen the video until April, that is to say, until after each of the applicants had been dismissed. He rejected the suggestion. Mr Davies, in giving evidence-in-chief, corroborated Mr Anderson's attendance at the Goulburn Street premises in February. He only recalled attending Goulburn Street with Mr Anderson on one occasion. He denied that it was possible that this was in April and said that it would have been prior to the dismissal action having been taken. There were tendered in evidence documents referred to as "action sheets" maintained by the Australian Federal Police. An entry of 14 April 1989 referred to a meeting at Goulburn Street at which, inter alia, Mr Anderson was present. An earlier entry of 15 March 1989 referred to a briefing for Mr Anderson being tentatively arranged for 20 March 1989. The entry of 20 March 1989 gave details of a briefing of Mr Davies, but showed no reference to an attendance by Mr Anderson. There was no reference in the action sheets to any meeting at which Mr Anderson attended in February 1989.
Mr Hunt-Sharman, in cross-examination, agreed that had there been a meeting with Mr Davies and Mr Anderson on 20 March 1989, he would expect it to have been recorded. He said in re-examination that if the briefing had been cancelled he would have expected to see a note of that fact as well in the action sheets. He said, in cross-examination, however, that he thought he recollected Mr Anderson coming to Goulburn Street on two occasions, as well as a meeting with Mr Anderson at his office. In re-examination, he was asked to give his conclusions as to whether a meeting with Mr Anderson went ahead on 20 March 1989 and replied that he tended to think that the meeting took place and that it had just not been recorded.
After giving careful consideration to the evidence on this point, I have formed the view that on the balance of probabilities a meeting did take place at Goulburn Street which Mr Anderson attended and at which he saw the video at some time earlier than the termination interviews and probably on 20 March 1989, rather than in February. I accept Mr Anderson as a witness of truth (indeed, it was not suggested that his credit was in any way impugned). No doubt after a lapse of time, it is difficult to remember whether a particular event occurred in February or March, but I doubt that Mr Anderson's memory was so fragile that he would be unable to remember whether he saw the video before he made the decision to terminate the employment of the applicants rather than at some time later. To reject Mr Anderson's evidence, would ultimately involve rejecting as well the clear recollection of Mr Davies that the video had been viewed by Mr Anderson in Mr Davies' company prior to the termination interviews and the recollection of Mr Hunt-Sharman that such an occasion had taken place probably on 20 March. While written records can generally be relied upon as being less prone to failure of recollection, they are not necessarily infallible. Accordingly, I accept Mr Anderson's evidence that he had seen the video prior to making the decisions which led to the holding of the termination interviews.
Mr Anderson, in making his decision, relied as well upon the views of Mr Davies who had had considerable experience in security matters. Mr Davies had discussed the matter on a number of occasions with Mr Hunt-Sharman and their views coincided. Mr Hunt-Sharman had communicated to Mr Davies the conclusions he had reached, based on his investigations, as to the modus operandi of porters concerned with pilfering passenger baggage, where, in his opinion, thefts were occurring, the operations of gangs of porters and the use of so called "cockatoos" stationed outside the aircraft to warn of any security guard or other personnel approaching the aircraft. He had also told Mr Davies of a practice of removing bags from the plane on which they were to travel after they had been searched, stripping them of their tags and ensuring that the luggage went onto another flight or flights and perhaps to other airports so that when the bag was eventually discovered it was impossible to identify precisely where the theft had occurred. He told Mr Davies that the practice was to target particular flights, particularly that proceeding to Coolangatta and that to Perth because passengers travelling long distances would be more likely to carry souvenirs. Soft bags and those without secure locks on them were targeted, as was baggage from international flights and that rejected as being too large to carry on board as hand luggage.
Mr Anderson communicated his decision to Miss Egles, the then Airport Manager for Sydney Airport.
It had, for some time before that, been strict policy of the Airline that any employees found interfering with passenger baggage would be dismissed instantly. This policy was frequently advised to staff who were given notices that the theft, removal or unauthorised possession of Airline property, or property in the care of the Airline, would result in summary dismissal.
Towards the end of February 1989, Miss Egles met with Mr Anderson and Mr Davies. At this meeting it was agreed that the police be requested to complete their investigations so that action could be taken against the various porters who had been identified as being implicated in thefts as a result of video surveillance. Miss Egles did not independently turn her mind to the guilt or innocence of the various porters concerned. She relied upon what she had been told by Mr Davies as the security expert. In particular, she relied upon Mr Davies telling her that both Mr Byrne and Mr Frew were implicated.
In a conversation said to have taken place around March 1989, Mr Anderson instructed Miss Egles to interview the porters concerned, including Mr Byrne and Mr Frew. They were to be given time to give an explanation for their behaviour; if an explanation was given, the matter was to be referred to Mr Anderson. If no explanation was given, the porter's employment was to be terminated. Apart from the fact that the interviews were to follow the normal procedures for termination interviews, no specific format was dictated by Mr Anderson.
On 22 March 1989, a search warrant was executed at the home of Mr Brosnan. Nothing was seized. Later in the same day Mr Brosnan was arrested and interviewed by the police. It was explained to him that the interview was in connection with enquiries into an "allegation" that he had "stolen Australian Airlines passenger luggage from the cargo hold of Australian Airlines aircraft at Sydney Kingsford Smith Airport during October 1988". He was asked whether, on 11 October 1988, he had opened passenger luggage in the cargo hold of flight TN2 and removed luggage from suitcases. He said that he could not recall anything of this nature. After a number of questions had been asked and answered (notwithstanding the usual caution) Mr Brosnan was shown the video. It was, it may be supposed, the first he was aware of its existence. Thereafter he declined to answer questions, including a question asking him to identify the other persons appearing on the video. That, of course, was his right.
Mr Brosnan was dismissed by the Airline the next day. He was at some time charged on a number of counts. Ultimately all were either withdrawn or dismissed. He said that after the police interview he had had no contact with either Mr Byrne or Mr Frew.
Mr Byrne's evidence was that after 22 March and before Mr Byrne was dismissed, probably on 23 March, he went over to Mr Brosnan's house to see what had happened and to discuss matters with him. He said that Mr Brosnan had told him of the video and that Mr Byrne appeared on it. At some time, either then or shortly after the dismissal, according to Mr Byrne, he and Mr Frew had seen a solicitor. He said that he had had a discussion with Mr Frew and told him that "he was being suspended on mistrust, being charged with mistrust, charged with attempting to steal".
Mr Frew said that he did not, between the time of his suspension and dismissal, speak to anyone.
On 23 March and 28 March 1989 respectively, search warrants were executed at the homes of Mr Byrne and Mr Frew. Nothing was seized. Each was subsequently taken by the police to be interviewed. Each was cautioned and answered some questions, denying involvement in stealing from passenger baggage. Each was then shown the video. The pages of the record of interview of Mr Byrne after the showing of the video are missing. Mr Hunt-Sharman said that thereafter Mr Byrne indicated that he did not wish to comment any further about any of the activity involved. Mr Frew signed a statement at the termination of his interview and after seeing the video. That statement is complete. It concluded as follows:

"I am aware that company policy does not allow any employee to open or interfere with passenger baggage in any way, the penalty is dismissal. I have never opened or interfered with passenger baggage, nor have I been present when any other person has done so.

During my employment at Australian Airlines I came to know Danny BROSNAN and George BYRNE. I would recognise these persons if I saw them. I have been shown by Det Sgt Moir of the Australian Federal Police a video... I can say that the male persons on the film are known to me as Danny BROSNAN and George BYRNE, Danny is the white haired one. I recall that during the film Danny says:

Danny said: (sic) George throw the Perth bag. I cannot recall that happening in real life and I do not want to comment on seeing it in the film. I do not recall having the four bags passed back out of the aircraft to me and I do not want to comment on seeing this on the film. I don't know what they were doing in the hold, you can draw your own conclusions."

Mr Anderson was aware that the interviews had taken place. He did not sight the records of interview, which were kept by the Police. Mr Davies, presumably also aware that the interviews had taken place, advised Miss Egles that each of Mr Byrne and Mr Frew had been interviewed by the police and had been shown a copy of the video. On the same day Miss Egles spoke to Miss Foisy, who was the Employee Relations Manager at Sydney airport at the time and told her that Byrne and Frew were to be interviewed and, in the absence of a satisfactory explanation, were to be dismissed. She requested that the interview take place that afternoon.
At an earlier time Miss Egles had advised Miss Foisy as to specific procedures to be adopted in conducting interviews with porters said to be implicated in misconduct. The occasion of this conversation, which probably took place on 16 February 1989, appears to have been an incident concerning a number of porters who were dismissed for being "off area", that is to say absent from the airport area whilst on duty. Specifically, they were to be told that evidence involving them had been obtained from ongoing investigations and that they were to be given an opportunity to put anything they wished to say, including why their employment should continue. Porters were also to be given the opportunity to discuss the matter privately with union delegates. They were "to be allowed natural justice" by being asked, individually, if they had any information or any other comments to make why the Airline should retain their services. Depending upon their answer they were to be advised that their services had been terminated or Mr Anderson was to be contacted.
During the months of March and April 1989 a number of porters were interviewed and subsequently dismissed. At each meeting two delegates from the Transport Workers Union were present, usually Mr Podlogar and Mr Conley. Ironically, Mr Podlogar himself was dismissed shortly after the dismissal of the applicants. The circumstances surrounding that dismissal are not in evidence. Also usually present at interviews were Miss Egles, Mr Davies, Mr Hazell, the assistant Security Manager and Mr Rod Smith who at that time was the Ramp Services Manager. Miss Foisy prepared for herself a script of what she should say. Unfortunately that no longer exists.
Miss Foisy arranged for Mr Byrne and Mr Frew to attend upon her at about 4.15 on 22 March 1989. She had been instructed to do so initially by Mr Davies. She then, she said, rang Mr Anderson and told him of her conversation with Mr Davies and sought the advice of Mr Anderson. He told her to suspend the men pending further investigation on full pay during that period. When the men presented themselves she saw them separately. According to her evidence she said to each that they were being suspended on full pay pending further investigations as a result of the ongoing investigations into the thieving at the airport. Neither applicant made any response.
Mr Frew gave evidence that two union representatives were present at this first interview and that Miss Foisy had said:

"You know there's been an ongoing federal police inquiry... You're suspended on full pay pending a federal police inquiry".

Mr Byrne gave similar evidence as to what Miss Foisy had said, although he could not remember whether a union representative was present. He said that this may well have been the case. Mr Podlogar, a union delegate who gave evidence, was clearly not present at the interview on 22 March. Mr Connolly, another union delegate present at the meetings subsequently held on 28 March 1989, was away from Sydney at the time of the trial and was thus unavailable to give evidence.
Mr Hazell, a Security Manager with the Airline, gave evidence that he was present at Miss Foisy's office on 22 April and that two union delegates were present. According to his evidence Miss Foisy said:

"As a result of police investigations into the theft of property from passenger baggage you will be suspended without prejudice and on full pay until these investigations have been completed. Is there anything you wish to say."

According to his evidence neither Mr Byrne nor Mr Frew replied.
Nothing much turns upon the question whether the Union delegates were there or not. If any delegate was there it was Mr Connolly, not Mr Podlogar. Nor do the exact words used by Miss Foisy matter. I would find, however, that she did say words which conveyed the idea that the police investigations were concerned with the theft of articles from customer baggage.
Afterwards Miss Foisy had further conversations with Miss Egles, Mr Davies and Mr Anderson. She was advised that charges had been laid against Mr Brosnan. She was told in brief detail what was to be seen on the video and that it did not appear to be normal procedure. She was told by Mr Davies that both Mr Byrne and Mr Frew had been shown the video and that they had not offered any explanation for the irregular loading of the baggage on the aircraft. It was said that there was a very serious breach of trust involved. Miss Egles said that the men concerned should be terminated but that the final decision rested with Mr Anderson. Mr Anderson confirmed that he knew of the situation and that unless further information was forthcoming that would make a difference (presumably from the men themselves by way of explanation) she should go ahead with the termination.
There is a significant difference in the accounts put forward by the witnesses for the applicants and the witnesses for the respondent of what occurred at the meetings on 28 March 1989 at which each of the applicants was dismissed.
According to the evidence of Miss Foisy, she followed the same procedure in each of the dismissal interviews she held in the months of March and April 1989. She called the applicants in together with the Union representatives and advised them that the Airline was considering terminating their services "due to breach of trust between the employer/employee relationship" (sic). She said that the way she would proceed was to send them both out and then call them back to talk to them individually.
When each man returned, accompanied by a union delegate, she asked whether there was any reason why the company should retain his services. The only comment she ever had in these interviews (she could not remember if it was from one of the applicants) was a reference to the number of years of service that person had with the Airline. The first interviewee was then asked to leave the room and the second called in to be asked the same question. After the second interviewee had departed there was some discussion among the management representatives present at the meeting and then the men were called back and in each case advised that they had been terminated "because of breach of contract - breach of trust between employer/employee relationship" (sic). They were advised that their services had been terminated as of that day.
According to Mr Byrne's evidence, he was at no time asked during the interview held on 28 March to explain his conduct or asked to put forward reasons why his employment should continue. He says that he was not told that his termination was as a result of evidence obtained through covert surveillance or ongoing police investigation. Nor was he told that the Airline relied upon any video evidence showing him to be engaged in any particular activity. According to him Miss Foisy said:

"You are given the right to resign."

To this he replied:

"Why should I want to resign?"

Miss Foisy is then said to have replied:

"Since you will not resign, I now terminate you for mistrust".

Mr Frew's evidence is similar. He denies that he was asked to explain his conduct or to put forward reasons why his employment should continue. He says that Miss Foisy did not use the word "misconduct". According to his evidence she did not say that the termination resulted from evidence obtained through covert surveillance or an on-going police investigation or say that the Airline had or had relied upon any video evidence implicating him. His version of the termination interview was as follows:

"Miss Foisey (sic) said to me: `We will give you the right to resign.'

I said words to the effect: `Why should I resign, I have done nothing wrong.' Miss Foisey (sic) said to me: `If you will not resign we will dismiss you on the grounds of mistrust.'

I replied: `In what way have I misused the company's trust?".

He says that Miss Foisy either made no reply or said words to the effect that he was terminated on the grounds of mistrust. She gave no direct answer to his question. Thereupon Mr Frew said:

"Mistrust? After 26 years of employment?"

The applicants called Mr Podlogar, at the time a union delegate for the Transport Workers Union, who, with a Mr Conley, was present at the 28 March interviews to represent the employees. His version of the interview with Mr Frew was as follows:

"Miss Foisey (sic): `We as employers can no longer trust you to carry out your duties would you like to resign?'

Frew: `Why?'

Miss Foisey (sic): `We can no longer trust you'. Frew: `That's fine treatment after 25 years that you now say you can't trust a bloke'. Miss Foisey (sic): `Since you won't resign we now terminate you for mistrust.'

Mr Podlogar's version of the Byrne interview was similar, save that he says that Miss Foisy said that Mr Byrne could obtain legal advice concerning the termination. Mr Podlogar's own employment was terminated on 31 March 1989 at an interview at which he says he was also given the option of resigning. Although Mr Podlogar and Mr Connolly were supposedly present to represent the men and to ensure that fair play was done, neither apparently protested that the men had not been given an opportunity to speak in their own defence, or for that matter that, according to Mr Podlogar's evidence, they were not told why they were dismissed.

Mr Podlogar's evidence must be viewed with some care. First, his own services had been terminated but a few days after the events with which the present case was concerned. He gave the impression that he was not favourably disposed to the Airline. He was asked his reaction to the investigation by the police into pilfering. His response was revealing:

"I was highly critical of the manner in which it had - the whole affair had been conducted. I had said so to the security, the chief security officer from Melbourne in that I believe the fact that they were using audio to tape our conversations and so on which is illegal in this state, to be a breach of my civil liberties and I said to that Mr Anderson as well and that I had made an appointment to speak to my member of parliament regarding the matter...".

Evidence of the interview was given on behalf of the Airline by Miss Egles, Mr Hazell and Mr Rodney Smith, who at the time was Ramp Services Manager at Mascot in charge of ground handling. His services included supervising porters and he reported directly to Miss Egles.
Miss Egles deposed to attending, as far as she could recall, the two termination interviews. She made no note of them. She had given Miss Foisy the instructions to which reference has already been made concerning the procedure to be followed at the interview (which she said was standard procedure for a termination interview) and as far as she could recall the interviews followed that procedure. Her recollection was that no reference was made to the way in which either of the applicants were implicated in the pilfering of passenger baggage. In her affidavit evidence, Miss Egles said she had no recollection of any specific reference to the video. She later said that she believed reference was made to the video evidence. She said that Miss Foisy had used words to the effect that it had been drawn to the Airline's attention that the respective men had been involved in passenger baggage theft and that it would need an explanation for what had happened. No explanation was forthcoming. The men were told that if they wished they could go outside with a union representative and then come back. Each availed themselves of the opportunity. She was unable to remember if Miss Foisy had given either of the men the option of resignation, although she accepted that in other interviews such an option was given. She recalled Miss Foisy saying words to the effect that we (ie the Airline) no longer trust you.
Mr Hazell gave evidence that prior to the meeting there had been a discussion between those present as to how the ensuing meetings were to be conducted. During that discussion Miss Foisy had said that she was going to invite the men in and explain to them that there was a matter under investigation, in which they were involved, concerning the theft of passenger baggage or passenger's property from baggage. Miss Foisy had then said that the meeting would see what their reply was. According to his evidence at the commencement of the interview (this evidence was that each man was interviewed separately) Miss Foisy had said:

"You are aware that there is an investigation into theft from passenger baggage and evidence involving you has been provided to the police. Do you have anything to say?"

In re-examination Mr Hazell said that Miss Foisy had made some reference to the video.
No explanation was forthcoming from either Mr Byrne or Mr Frew. Each was then given the opportunity to discuss the matter with the union delegates. When no explanation was given, according to his evidence each was told:

"In that case your employment is terminated on the grounds of mistrust."

Mr Hazell had prepared for his own purposes, at some time later than the event, a list of porters (there were 23 in all) who had been dismissed or given the opportunity to resign in March 1989. That document showed as a heading under which the names of Messrs Byrne, Frew and Podlogar appear the words:

"The three listed hereunder, were terminated in accordance with the conditions of their award, after being given the opportunity to resign."

Notwithstanding his use of these words, Mr Hazell was adamant that the applicants were never offered the opportunity to resign. He could proffer no explanation why the document was cast as it was. His diary, recording a contemporaneous entry, read merely:

"George BYRNE 2.9.40

49 Eynham Road, Milperra.

Terminated, reason explained as "Mistrust". George Mortimer FREW 18.9.39 8/70 Banks Ave Pagewood.

Terminated, reason explained as "Mistrust" Connected with thefts with BROSNAN."

Finally, Mr Smith, who attended many of the termination interviews held at or around the same time, was unsure whether he had attended the termination interviews of Mr Byrne and Mr Frew. (The evidence of the other witnesses for the Airline suggests that he did.) He said that at each interview he attended the porters were told that there was some evidence implicating them and were given an opportunity to put anything they wished to say. He said that they were also given the opportunity to discuss their position privately with the union delegates. At some of the interviews resignation was discussed. The suggestion of resignation sometimes came from the men or the union representative.
Observations on Credit
The credit of Mr Byrne and Mr Frew was in issue in the proceedings in two ways. First there is the issue of the involvement of each of the men in the alleged pilfering of customer baggage in October 1988. Each denied either active participation or indeed knowledge of what Mr Brosnan was doing as depicted on the video. Secondly, having regard to the submissions that were made on behalf of the applicants of the requirements arising from the provisions of the award that the termination be not harsh, unjust or unreasonable, it is necessary to determine whether the version of what happened at the termination interviews given by each of the applicants is to be preferred to that given by the witnesses for the respondent.
Mr Byrne admitted that, placed as he was no more than two feet from Mr Brosnan in the hold, he was in a position to see Mr Brosnan and what he was doing. Mr Brosnan gave evidence and was cross-examined as to his role in the events depicted on the video in some detail. He was unable to give any satisfactory explanation. The only explanation that he gave was that perhaps he was examining the baggage slips to see whether the baggage was on the right flight, or addressed for the right destination, or was perhaps transship baggage, that is to say baggage that has been booked in for an ultimate destination beyond Adelaide or Perth, or booked from a port other than Sydney for transshipment through Sydney for some ultimate destination. He had no explanation for why this would take up to one minute, when a perusal of colour-coded tags on which the destination is clearly shown would take but a few seconds at the very most. The same can be said for transshipment labels, which can be assumed to be less clear.
Nor could Mr Brosnan explain why, after calling for a Perth bag he would ultimately unload it. While it is possible that the baggage could have been either wrongly labelled or been a priority bag and thus to be loaded in another hold in the aircraft, in either case it could be assumed that this would have been picked up by Mr Frew before he handed the bag to Mr Brosnan for loading. And even if one mistake may have been committed, it hardly explains how it came about that a number of bags were, after being loaded and examined by Mr Brosnan, offloaded. I have viewed the video on a number of occasions and heard evidence as well from Mr Byrne, Mr Frew and others familiar with the ordinary operation of loading and unloading. In my view, and accepting that having regard to the gravity of the matter a higher onus should be applied, (cf Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; M v M (1988) 166 CLR 69 at 76-77) I would find that Mr Brosnan was indeed searching through customer baggage, with the purpose of stealing items from that luggage. In so holding I am aware that the charges against him were ultimately dismissed or withdrawn. But if he were acquitted after a hearing, it is probable that Mr Brosnan himself did not give evidence as he did before me. I had the opportunity of observing him in the witness box under cross-examination and have reached my conclusion based upon this observation as well as viewing the video.
To return to Mr Byrne, it might, but for one matter, have been possible to conclude that although placed to see Mr Brosnan, he did not in fact do so because he was going about his work loading the luggage destined for Adelaide. I might observe, he was not doing so with frenetic haste.
The problem with this interpretation, which was strenuously advanced by his counsel, is that Mr Byrne can be seen pushing bags (soft bags at that) in the direction of Mr Brosnan, bags which Mr Brosnan in due course takes behind the screen that had been prepared. Add to this the fact that some of these bags in due course return to the door of the hold for off-loading and it is difficult indeed to conclude that Mr Byrne was innocent of all participation in or knowledge of what Mr Brosnan was doing.
Again Mr Byrne was vigorously cross-examined. He was unable to give any logical explanation for Mr Brosnan's actions, or for that matter his own in pushing bags to Mr Brosnan. I do not accept his evidence that he did not know what Mr Brosnan was doing. The furthest he was initially prepared to go was to agree that Mr Brosnan's behaviour was "unusual", and "a bit suspicious". Later, when pressed with further frames from the video, he went as far as agreeing that Mr Brosnan's behaviour looked suspicious. He could, however, not come up with any explanation for Mr Brosnan's behaviour other than that he was going through the passenger baggage. He sought to explain his passing bags in the direction of Mr Brosnan as putting these bags to one side to be loaded later. He was forced to concede, after viewing the video, that there was no way that the suspicious acts of Mr Brosnan could have been carried out without his observing them at least in part.
I do not accept Mr Byrne's denial of involvement in, or knowledge of, what Mr Brosnan was doing and find that Mr Byrne was involved in the activities which Mr Brosnan was undertaking, in the sense that he had full knowledge of what Mr Brosnan was doing and aided him in carrying out the activity. Again, in reaching that conclusion, I have been guided by the onus suggested in Briginshaw v Briginshaw (supra). I note too that while in his affidavit he adverted to only one brush with the law, he had, as emerged in cross-examination, a number of convictions, albeit some a considerable time in the past. These convictions, of course, are irrelevant to the present proceedings; his partial untruth in omitting them from his affidavit is another matter.
The position is more difficult with Mr Frew. He does not appear on the video, although his presence on the tarmac is acknowledged. Indeed Mr Frew did not dispute that the person called "George" taking luggage from the trolley for loading was himself.
For Mr Frew, it was submitted that he could see little, and in any event did not look at what Mr Brosnan was doing. He was assisting Mr Byrne in the loading of locker 4. Thus it was said that he too was neither involved in nor knew of Mr Brosnan's activities.
I have given this question anxious consideration but have ultimately concluded that Mr Frew also was involved in the activities undertaken by Mr Brosnan, in the sense that he knew of them and assisted in their being carried out. I have done so for a number of reasons. First, I observed Mr Frew in the witness box. His answers to questions were sometimes evasive. He gave the clear impression that even if he were aware of acts of pilfering there was no way that he would report them. Although he did say that if aware of pilfering he would tell that person to stop and if he did not, would "walk off the plane". I do not accept that he would so act.
It is clear that if Mr Frew were loading from the trolley, his vision into locker 3 would be obstructed. That is not to say that there would be no vision. Some vision is available where the webbing is attached by straps to the floor and the pole. More is available as the porter leans into the plane to swing the luggage up into the hold. Even without this vision, the back of Mr Brosnan's head and his rear would have been clearly visible to Mr Frew and it would have been clear that Mr Brosnan was leaning over something for a considerable time and not stacking luggage. Further, it would have been clear that Mr Brosnan had built himself a screen with a suitcase.
But, what is more important are two matters. First Mr Frew handed the Perth suitcase up to Mr Brosnan and ultimately took it back. He sought no explanation from Mr Brosnan for why it was returned. Nor did he seek any explanation for why the smaller soft bags were off-loaded. Secondly, if Mr Frew had not been in on the activity it would not have been possible for Mr Brosnan, without fear of being caught, to go about the activities in the blatant and apparently fearless way that he did.
Other matters affecting Mr Frew's credit were raised. In his affidavit evidence he had said that he had not been the subject of any disciplinary procedure in the course of his employment with the Airline. In fact, he had been clocked off work by Mr Brosnan and warned for this. However, I pay little attention to this.
He deposed to having had no contact with either Mr Brosnan or Mr Byrne between the suspension interview and the termination interview. This is not only improbable, but also is contradicted by the evidence of Mr Byrne, whose evidence on this point I would accept. Mr Frew's persistent response to viewing the video and being questioned about what Mr Brosnan might have been doing, was a stout assertion that he did not know what Mr Brosnan was in fact doing. In so doing he gave the appearance of avoiding answering the questions posed to him.
It was submitted that I should take into consideration the fact that Mr Frew, like Mr Byrne, had, in his interview with the police, been co-operative until shown the video when he refused to answer any further questions. This is not a matter of significance in my view. Any person has the right to maintain silence when questioned by the police, particularly when there is evidence which might implicate him in the commission of an offence. To later use the exercise of that right to denigrate the credit of that person seems to me to be totally unfair. If there be any significance in this evidence at all, it is that at no time did Mr Frew give an innocent explanation of what occurred on the video.
No attempt was made to attack the credit of any of the witnesses of the respondent. Rather, it was said their credit should be accepted, but it should be recognised that as no records of the termination interviews were kept, defects in memory could be accepted. There existed, so it was said, a contemporaneous record, in the form of the note of Mr Hazell, which should be accepted as correct, at least as far as it went. This record provided corroboration for the version of the termination interviews as deposed to by the applicants.
I formed a favourable view of Miss Foisy in the witness box. She had done a diploma course in industrial relations and impressed me as a most conscientious and reliable witness. Her conscientiousness is reflected in the fact that she wrote out for herself a script of what she was to say during the interviews. I would have no hesitation in accepting that she followed that script. She was no longer employed by the Airline and there was no reason why she should not assist the court to the best of her recollection, which I am sure she did. There is in truth little discrepancy in the evidence given by the various witnesses for the respondent Airline that could not be accounted for by the usual vagaries of recollection. I place little reliance upon the question whether the applicants were given the option to resign as the witnesses for the applicants said, and as Mr Hazell's memorandum would support, or not, as Miss Foisy, Miss Egles and Mr Hazell say. Mr Anderson, whose credit was also not under attack, deposed that his instructions were such that the applicants should, absent an explanation, be dismissed. He said that other porters on later occasions were given the opportunity to resign, but this opportunity was not proffered to Mr Byrne or Mr Frew. Having regard to the matters affecting Mr Byrne's credit and that of Mr Frew, I would prefer the evidence given on behalf of the respondent to that of either Mr Byrne or Mr Frew, to the extent that there may be significant conflict.
It follows that I would find that at the termination interviews Miss Foisy outlined at the outset that the Airline was considering termination of the applicants' services due to breach of trust. There was some, albeit limited, reference to the video. It is more probable than not, having regard to the evidence of Mr Hazell, Miss Egles and Mr Smith, that reference was made to the involvement of the applicants in passenger baggage theft and the men were invited to give an explanation. She then sent the men out of the room with the union representative to confer. It is probable, despite her evidence that she did not see the men together at any time. When the men returned again individually, I find that she then asked whether there was any reason why their services should be retained. It is probable that Mr Frew at some stage referred to his 26 years of employment. When no answer on the substantive matter of baggage pilfering was forthcoming, she then advised that the service of each man was to be terminated. Some reference was made to lack of trust, probably the word "mistrust" was used. I find it unnecessary to decide whether the men were given the option to resign, as no submission was made by either party that the use of these words should affect the outcome, except so far as that use might assist in the overall finding of what happened at the interview.
The applicants' submissions
The starting point of the applicants' submissions on what in effect was their real case, namely the claim for damages against the Airlines, was that the provisions of cl.11(a) of the Award were incorporated into the contract of service between the Airline and each of the applicants. It was then said that the requirement that termination be not harsh, unjust or unreasonable carried with it a number of obligations which had to be observed by the Airline in terminating the services of an employee. Failure to observe any of them led, it was submitted, to the result that the termination would be harsh, unjust or unreasonable and in consequence the dismissal would be wrongful, thus entitling the applicants to damages. Damages were, so it was said, to be assessed for the loss of the opportunity to continue the employment, discounted if appropriate (it was not, so it was said, in the present case) for foreseeable events which might have brought the employment to an end: cf Wheeler v Phillip Morris Ltd (1989) 97 ALR 282 at 312.
This meant, in the present case, that a calculation should be made of the amount that could have been earned by the men had they continued in their employment with the Airline until normal retirement age, ie 65 years, setting off those amounts which have been or will be earned by each of the applicants in their respective new employment positions. No allowance should, it was submitted, be made for income tax otherwise payable on that salary. In the result, the applicants submitted that they were entitled to the following amounts: Mr Byrne, $192,313 and Mr Frew, $145,387.

One matter which gave me some disquiet was the failure of the Airline to interview Mr Harvey, the other member of Mr Frew's crew. It was open to the applicants to call him, (he was still employed by the Airline) but no attempt was made so to do. This at least enables me to draw the inference that there was nothing in the evidence which he might have given which would have assisted the applicants. Although I think that it would have been desirable that the applicant interview Mr Harvey before finally making a decision to terminate the services of the men, I do not think that it can be said that the failure so to do given the evidence of the video rendered the termination harsh, unjust or unreasonable. I think that in a case such as the present, regard must be had additionally to the public interest, where the continued employment of the applicants through an extensive investigation, might have led to losses suffered by travellers and losses to the Airline. In the latter case, those losses could have been not only losses of revenue but also of reputation.
The obligation to specify the misconduct relied upon
Fairness and justice require, at least generally, that there be identified to an employee, who is dismissed because he is believed to be guilty of misconduct, the nature of the misconduct relied upon. He should not, as counsel for the applicants put it, be called upon to answer a case in the negative, ie one that is not put. It was said also that the events in question had occurred months earlier. That is true. It would certainly have been desirable that the Airline raise the matter earlier. On the other hand, on the facts of the present case, there was still an ongoing police investigation which might have been hindered by precipitate action and the mere fact that time elapsed did not, in my opinion, render the dismissal harsh, unjust or unreasonable.
No doubt, if the men had not been advised that the termination concerned passenger baggage and no reference had been made to the video which each of the men had viewed a short time before, the submission would have had considerable force. However, on the facts as I have found them, the men were told the general nature of the misconduct involved and were referred to the video which they had but recently seen. In these circumstances, the dismissal in the absence of an innocent explanation could not be said to be harsh, unjust or unreasonable.
The obligation to consider other relevant matters
The final submission was that the Airline had failed to inquire into the applicants' prior conduct and their history of service with the airline. It was said also that it had failed to consider the matters disclosed in the records of interview given to the police. This latter matter may be disposed of simply. The material was not available to the Airline. However, security officers with the Airline had enquired of the police whether any explanation was given and were advised that none was.
No doubt prior long service with the airline will often be a matter of importance to weigh in the balance in determining whether that employee should be dismissed. It was a matter known to some of the participants in the termination interview. The extent of Mr Anderson's knowledge, he being the person who made the actual decision, is unknown. He was not cross-examined on the matter. He was aware that Mr Frew was alleged to have been a person who went "off airport" regularly to hotels etc. He also believed that stolen items were often disposed of in hotels. He was aware that correlation studies between losses and teams of porters had not thrown up any suspicion of pilfering against either Mr Frew or Mr Byrne. On the other hand, he believed, on reasonable grounds, that the applicants were involved in the pilfering of baggage and that belief justified his actions in dismissing the applicants. Length of service with the Airline, a matter treated by the award itself as relevant in calculating the period of notice required in the event of a dismissal on notice (not being a summary dismissal), could not, once involvement in pilfering was established, have acted as a justification to prevent dismissal.
A submission was put that the men had been dismissed, not for misconduct but for "mistrust", ie lack of trust in them. This submission was based upon the evidence of the termination interview and especially the use by Miss Foisy of the word "mistrust". I do not think that too much weight should be placed on the use of "mistrust" divorced from the context of the interview itself: that being involvement in pilfering and the video. It was said that mistrust is not misconduct; that there is no half way ground. Further, the reference to "mistrust" suggested doubt. However, on the evidence, I think that it was tolerably clear from what was said by Miss Foisy, and it was understood by each of the applicants, that the reasons for the dismissal lay in misconduct constituted by their involvement in the pilfering episode shown on the video.
Conclusion
For the reasons I have given I am of the view that the applicants have not succeeded in showing that their dismissal was in contravention of the award. Accordingly, it is not necessary to consider in detail the question of damages.
I content myself with making two observations. The first is that in determining damages in a case such as the present it would be necessary to take into account by way of discount the possibility that the employee could, prior to reaching the retirement date, have been dismissed in a dismissal that was not harsh, unjust or unreasonable. It would be erroneous in my mind to assume that the employer could never terminate the employment and that damages should accordingly be calculated as if the employment would have continued until ordinary retirement age. What the extent of that possibility is will be a matter of fact; its impact on the calculation a matter of estimate. My view is now reinforced by the judgment of Sheppard and Heerey JJ. in Bostik (Australia) Pty Ltd v Gorgevski (at 26). This does not mean, as counsel for the airline submitted, that it is to be assumed in calculating damages that the employee will be dismissed immediately by the giving of such period of notice as the award may require, in the present case five weeks. The proper interpretation of the award is that while the termination of employment of an employee, whose conduct does not justify summary dismissal, requires at least the giving of the minimum period of notice as prescribed by the award, termination upon that period of notice must still be examined to determine whether in the circumstances it is harsh, unjust or unreasonable. This is so even if, as von Doussa J. observed in Lane v Arrowcrest Group Pty Ltd (at 75), the lawfulness of the dismissal will be a relevant circumstance to take into account in determining whether the dismissal is harsh, unjust or unreasonable.
The second matter debated before me was the question whether in calculating damages regard should be had to income tax payable on the damages themselves. There seems to be no reason to doubt that in a case such as the present the whole of any damages award would be taxable pursuant to the provisions of s.27B of the Income Tax Assessment Act 1936 as an "eligible termination payment" within the meaning of that expression in s.27A of that Act. Thus I agree, with respect, with Gray J. in Wheeler that the decision of the High Court in Cullen v Trappell (1980) 146 CLR 1 is distinguishable and that accordingly were damages to be awarded, no deduction should be made for income tax. This conclusion is also reinforced by the judgment of Sheppard and Heerey JJ. in Bostik (Australia) Pty Ltd v Gorgevski (at 27).
I would, accordingly dismiss the application. Having regard to the provisions of s.347 of the Industrial Relations Act I think that no order should be made as to the costs of the present proceedings. Although the applicants have been unsuccessful, it could not be said that either had instituted the proceedings arising under that Act vexatiously or without reasonable cause. No submission was made by the Airline that I should find vexatiousness or lack of reasonable cause. The claim for damages being an associated matter, is subsumed under the rubric of a matter arising under the Industrial Relations Act and is not to be treated as a separate matter: Thompson v Hodder (1989) 21 FCR 467 at 469.

[1992] FCA 373

04 JUNE 1992