Clelland v Q.A Management Pty Ltd

[1996] IRCA 307

DECISION NO:  307/96

C A T C H W O R D S

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - alleged UNLAWFUL TERMINATION - whether VALID REASON for termination - failure to obey lawful instruction - APPLICATION dismissed.

Industrial Relations Act 1988 Ss 170DB, 170DC, 170DE, 170DE(1), 170DE(2), 170EA.

ASU  v Royal Victorian Institute for the Blind IRCA No. 431 of 1995, Chancellor JR, 1 September 1995, unreported.

John CLELLAND -v- Q.A. MANAGEMENT PTY LTD 
WI 2021 of 1995

BEFORE:       R. D. FARRELL JR
PLACE:          PERTH
DATE:            4 July 1996

IN THE INDUSTRIAL RELATIONS    )
COURT OF AUSTRALIA                   )
WESTERN AUSTRALIA  )
DISTRICT REGISTRY  )         No. WI 2021 of 1995

BETWEEN:  John CLELLAND
  -         Applicant

AND:  Q.A. MANAGEMENT PTY LTD
               -         Respondent

MINUTE OF ORDERS

BEFORE:               R. D. FARRELL JR

PLACE:                  PERTH

DATE:  4 July 1996

THE COURT DECLARES AND ORDERS THAT:

1.         The application is dismissed.

NOTE:          Settlement and entry of Orders is dealt with by Order 36 of the   Industrial Relations Court Rules

IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY

WI2021 of 1995

BETWEEN:

JOHN CLELLAND
Applicant

AND:

Q. A. MANAGEMENT PTY LTD
Respondent

REASONS FOR DECISION

4 July 1996     R. D. FARRELL JR

1. This is an application under Section 170EA of the Industrial Relations Act 1988 for compensation arising from the alleged unlawful termination of the employment of the applicant, John Clelland (“Mr Clelland”), by the respondent, Q.A. Management Pty Ltd (“QAM”). Reinstatement was not sought.

1. Mr Ward, who appeared for Mr Clelland, contends that there was no valid reason for Mr Clelland’s dismissal, contrary to Section 170DE(1) of the Act, and that in any event his dismissal was harsh, unjust or unreasonable contrary to section 170DE(2) of the Act

2. The dismissal was a summary dismissal. Mr Tomlinson, who appeared for QAM, contends that the dismissal was justified by the alleged misconduct of Mr Clelland.

1. QAM was in the business of providing quality assurance systems, training and  services to other businesses. Mr Clelland was employed by QAM in November 1993 as a sales representative.

Reasons for Dismissal

1. Mr Tomlinson contends that the reasons for the dismissal were essentially as set out in the letter of termination dated 16 August 1995, which was given to Mr Clelland on the morning of 17 August 1995.

1. The letter, with formal parts omitted, reads as follows:

   “With reference to the events of 16 August 1995 in my office, I have had no alternative but to terminate your employment forthwith.

   The reasons for termination was the insulting and objectional (sic) behaviour and your refusal to comply with company policy and my personal requests.

   As you are aware, this is not an isolated incident as you have refused to follow directions for some time.

   Your dismissal is immediate and full return of all company documents, office keys etc. is requested. It is with regret that this situation has eventuated.

   P S Wilton

   MANAGING DIRECTOR”

2. The reasons for termination nominated by QAM on Mr Clelland’s Department of Social Security Separation Certificate are broadly consistent with the letter. He is described as having been dismissed for “misconduct” which is detailed as:

   ·       “Insulting and objectionable behaviour”; and

   ·       “Refusing to comply with company policy and directives.”

The Events of 16 August 1995

1. The dismissal was precipitated by an argument between Mr Clelland and Mr Phil  Wilton, QAM’s Managing Director, late in the afternoon of 16 August 1995.

1. Evidence as to the content of this discussion was given by the participants, and also by Mrs Cheryl MacLachlan, Mr Wilton’s personal assistant, whom I am satisfied clearly overheard the discussion. I find that the dialogue was broadly as follows:

1. When Mr Clelland came into the office on the afternoon of 16 August 1995, Mr Wilton enquired of him where he had been the previous day. Mr Clelland responded that he had been at Flag Electrical. He explained that “Jon” from Flag Electrical had contacted him on his mobile phone.

1. Mr Wilton complained that Mr Clelland had “again failed to follow the company’s procedures”, and reiterated that Mr Clelland should not be using his mobile phone. He says he told Mr Clelland he should be starting and finishing in the office, that his attendance at Flag Electrical was unauthorised and that there were far more urgent things for him to be doing.

1. According to Mrs MacLachlan, Mr Wilton said that all the work should come through the office, and that he would distribute it as he saw fit. She says that Mr Clelland responded that “That’s the way I work - if you don’t like it, you’ll have to sack me”.

1. Mr Clelland tried to cut short the conversation, explaining that he had to go to an appointment with a trucking company in West Swan. According to Mr Wilton, Mr Clelland said he “wasn’t taking this crap any more”, and was going out on another visit.

1. Mr Wilton told him to cancel the appointment in West Swan, because he wanted to continue the discussion. Mr Clelland refused to cancel the appointment.

1. The remainder of the discussion was characterised by Mr Clelland “toing and froing” from the office, as he alternatively went to leave, and returned, before he ultimately left.

1. Mr Clelland says that Mr Wilton told him that if he went to the appointment he would be dismissed. Mr Wilton agrees that he told Mr Clelland not to do the trip, and that there would be no point in him coming in in the morning if he did. If he went to the appointment he could “keep going”. Mr Clelland’s response was that Mr Wilton would have to sack him.

1. Mr Clelland ended the conversation by saying that he had an appointment and he was going, and that he wanted a letter of termination on his desk when he came back in the morning.

1. Mr Wilton then called after Mr Clelland, telling him not to walk away, and that he should not do any more work for QAM.

1. The most significant divergence in the evidence was with regard to the demeanour of the participants.

1. According to Mr Clelland, Mr Wilton became “very agitated”. When asked to describe the observable manifestations of Mr Wilton’s agitation, Mr Clelland referred to Mr Wilton’s leaning forward and using a more forceful, determined and relatively louder tone of voice. He noted that Mr Wilton was not a very demonstrative person, who was usually softly spoken - a quiet sort. This observation accorded with my assessment based upon Mr Wilton’s demeanour in the witness box.

2. Mr Clelland denies that he became aggressive. Rather, he says he remained “cool”.

1. Mrs MacLachlan, by contrast, says that Mr Clelland became loud. At those times where she was able to observe the participants, for example, when they were at the door of the office, she noticed that Mr Clelland was “sniggering”. She says that at other times he appeared upset. By contrast, she thought that Mr Wilton appeared calm.

1. Mr Wilton says that Mr Clelland got quite angry, and extremely agitated.

1. Mrs MacLachlan made a diary note that night. It reads as follows:

   “John Clelland

   Queried how work at flag was obtained.

   Advised by Mobile. Again repeated that personal mobiles were not to be used & all work should be channelled in to office for allocation

   John advised he wanted a termination letter on his desk tomorrow morning”

1. A more detailed file note was prepared by Mrs MacLachlan in November 1995, based upon other notes which she has since discarded. While Mrs MacLachlan said the later note was “more or less” the same as her contemporaneous notes, she conceded that some editing had taken place, and accordingly I place less weight on it. For what it is worth, it reads as follows:

   “16 AUGUST 1995

   John Clelland’s behaviour was disgraceful. He was extremely rude and was goading Phil.

   John was loud, and his manner was offensive. Phil asked John something about work at Flag and John seemed to get upset with that and started being unreasonable. John said something about his mobile and Phil asked, as he had done so before, that John not give his personal mobile number out to QA Management Services clients and John replied ‘I will give it out to whom I want when I want’. He also told Phil that was the way he worked and if he didn’t like it he would have to sack him. He also asked for a termination letter to be on his desk the next morning.

   He then attempted to leave the office several times to go to a client’s premises but Phil was calling him back and telling him not to do any more work for QA Management Services and John kept saying, ‘I have an appointment’.”

1. I have no doubt that the feelings of both men ran high during the altercation. However, having considered the evidence and the demeanour of Messrs Clelland and Wilton in the witness box, I am satisfied that Mr Clelland’s demeanour is likely to have been more demonstrative of his agitation than Mr Wilton.

“Insulting and Objectionable Behaviour”?

1. The commencement of Mr Clelland’s employment followed some negotiations, part of which involved the purchase by QAM of the “work in hand” of Mr Clelland’s private firm J.E. & B Clelland. Some of the terms of Mr Clelland’s employment were reduced to writing.

1. The written “General Terms and Conditions of Employment” included a clause headed “Dismissal”, which provides:

   “Dismissal without notice will apply for loss of driving license (sic), attending a works or clients office under the influence of alcohol and drugs, use of insulting or objectionable language or behaviour, criminal offence whilst at work.”

1. QAM proceeded on the basis that, by showing that Mr Clelland used insulting and objectionable language or behaviour, and that this language or behaviour was the reason for his dismissal, then they would have been entitled under the employment contract to effect Mr Clelland’s dismissal without notice.

1. While the requirements of the Act over-ride any contractual provisions, it may be arguable that the contract makes it clear that the specified behaviour constitutes misconduct.

2. With respect to insulting or objectionable language, the relevant standard is the standard applying at the particular workplace. There was little evidence specifically on this point. While Mr Wilton gave evidence of particular phrases which were used by Mr Clelland, which might be considered swearing, I did not detect any particular offence on Mr Wilton’s part to the language used. His objection appeared to be more generally to Mr Clelland’s attitude.

1. Mrs MacLachlan, who overheard the conversation, agreed that nothing was said that she considered insulting. Nor did she think Mr Clelland’s behaviour was “objectionable”. While Mr Clelland was upset, and this was reflected in his demeanour and behaviour, she agreed that it was only human to become upset in such circumstances, and that his behaviour in that context was not objectionable. Mrs MacLachlan’s concessions on this point are notable, given that generally her evidence indicated some sympathy for Mr Wilton’s position.

1. While I accept that Mr Clelland probably used the language attributed to him by Mr Wilton and probably demonstrated an insubordinate attitude to Mr Wilton in the course of the exchange, I am not satisfied that this in isolation would constitute a valid reason for dismissal in these circumstances.

Disobedience of Direction?

1. However, wilful disobedience of a lawful direction can constitute grounds for summary dismissal.

1. It is not disputed that Mr Wilton told Mr Clelland not to attend the appointment at West Swan. He made it clear to Mr Clelland that disobedience of this direction would result in his dismissal. Nevertheless, Mr Clelland disobeyed his order and attended the appointment. I find on balance that he requested that a letter of termination be prepared for him. I can only surmise that in doing so he wished to avoid any claim that he was abandoning his employment.

1. Mr Clelland sought to justify his actions at the hearing by claiming that he was acting in the interests of QAM by disobeying Mr Wilton and attending the appointment. He explained that he had been trying for some time to secure the appointment.

1. I cannot know, on the evidence before me, what was in QAM’s best interests. That was a matter for Mr Wilton’s judgment. It was Mr Wilton’s judgment that it was in QAM’s best interests for Mr Clelland to cancel the appointment so that the matters in dispute between he and Mr Wilton could be immediately resolved.  Mr Clelland clearly disagreed, but it was Mr Wilton’s judgment to make, and it was not an unlawful or unreasonable direction.

1. I am satisfied that Mr Clelland’s disobedience of Mr Wilton’s lawful order that he not attend the appointment constitutes a valid reason for dismissal, and indeed that it constitutes serious misconduct so that notice need not be paid pursuant to Section 170DB of the Act. Misconduct has traditionally been defined as conduct which indicates that the employee no longer intends to be bound by the contract. I am satisfied Mr Clelland’s refusal to do as directed, in this context, falls within that definition.

Refusal to Comply with Company Policy

1. I am satisfied, having considered the evidence, that Mr Clelland’s final refusal of Mr Wilton’s order on 16 August 1995 was the culmination of a prolonged period of resistance on the part of Mr Clelland to Mr Wilton’s attempts to exert greater control over the manner in which he went about his work. Mr Wilton attempted to do so by requiring Mr Clelland to comply with the general requirements of employees that they begin and end each day at the office, notify the office at all times of their whereabouts and cease fielding calls from QAM customers on mobile phones, so that Mr Wilton could keep control over the allocation of work.

1. Mr Clelland was used to working for himself, and resented Mr Wilton’s attempts to monitor and control the manner in which he went about his job. He also held the view that some of the policies, such as that relating to mobile phones, were not good business practice. I find that this frustration led Mr Clelland, on more than one occasion, to make statements which amounted to a challenge that Mr Wilton dismiss him if he did not like the way Mr Clelland chose to do the job.

1. Were it not for the final clear act of disobedience by Mr Clelland, these refusals to comply with QAM’s policies may well have amounted to a valid reason for dismissal. In any event, in the context of this work history, I am satisfied that the ultimate decision to dismiss was not harsh, unjust or unreasonable.

1. I note at this point that there was evidence from another employee, Ms Nolan, concerning another incident alleged to have occurred in the course of Mr Clelland’s employment. Discrepancies in the detail of the evidence were such that, on balance, I was not satisfied that the incident took place in the manner alleged. Nor was I satisfied that the evidence relating to the use by the applicant of his petrol allowance disclosed a valid reason for dismissal.

Procedural Fairness

1. The final matter to be addressed is whether the requirements of Section 170DC have been met.

1. The events of 16 August 1995 were immediately followed by the issuing of the letter of termination. Was Mr Clelland entitled to an opportunity to defend himself prior to the decision being taken?

1. I am satisfied that, in the circumstances of this case where:

   ·Mr Wilton warned Mr Clelland in advance that failure to obey his order to cancel the appointment would result in dismissal; and

   ·Mr Clelland requested a letter of termination to be on his desk the following day,

QAM could not reasonably be expected to give Mr Clelland the opportunity to defend himself. The provisions of paragraph (b) of Section 170DC therefore apply, so that there is no breach of Section 170DC.

1. It might be argued that Mr Clelland acted in the heat of the moment, and should have been given an opportunity to reconsider or to explain or excuse his actions. If that were so then, by analogy to the law relating to resignations in the “heat of the moment”, the obligation would lie on Mr Clelland to act to retrieve the situation immediately he had cooled down. In any event, even in his evidence Mr Clelland did not concede that he had anything to apologise or offer excuses for.

1. There are some parallels with the decision of Chancellor JR in ASU v Royal Victorian Institute for the Blind (IRCA No. 431 of 1995, 1/9/95, unreported). In that case, the applicant refused to stay at work and meet with his manager, despite being told that failure to do so would result in his termination. Chancellor JR held that in relation to the dismissal as a result of failure to obey a lawful instruction, the employer could not reasonably have been expected to give the employee that opportunity.

Conclusion

1. Accordingly, I will order that the application be dismissed.

   I certify that this and the preceding 10 pages
   are a true copy of the reasons for decision of
   Judicial Registrar R.D. Farrell.

   Associate:
   Dated:

   APPEARANCES

   Counsel for the applicant:  Mr P. Ward

   Solicitors for the applicant:  Peter Ward

   Representative for the respondent:  Mr A. Tomlinson

   Chamber of Commerce and Industry (WA)

   Dates of Hearing:  17, 18 and 31 January, and 2 February               1996

   Date of Judgment:  4 July 1996