Construction, Forestry, Mining and Energy Union (Drury) and BHP Refractories
[1994] IRCA 162
•08 December 1994
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
SYDNEY DISTRICT REGISTRY NO. NI 288 of 1994
Between: CONSTRUCTION, FORESTRY, MINING
AND ENERGY UNION (Drury)
Applicant
And: BHP REFRACTORIES PTY LTD
Respondent
Before: Judicial Registrar Walker
Place: Sydney
Date: 8 December 1994
REASONS FOR JUDGMENT
Raymond Drury is a Refractory Bricklayers Labourer and has been since he left school 30 years ago. From the evidence given in this case it is apparent that Mr Drury is a very skilled and respected workman in his field and at the time of his dismissal was in fact the Leading Hand on site.
He has worked for other companies in this area of specialist work, including some twenty years with Andreco Hurlls, however over the last four years he has been employed on a regular basis with the Respondent, as a Refractories brickies labourer. He would work on various projects that the Respondent had been contracted to do, more often from the beginning to the end but sometimes he would move onto other jobs as they came on line. In fact he had in the past given the Respondent one days notice and moved onto another job with his old employer Andreco Hurlls, before the Respondents project had been completed.
He gave evidence that last year he had been employed by the Respondent at a project in Whyalla. Bob Seston had rang him to go onto the job and it was to be completed in five stages. He explained the system in the following way,
“Like, for last year, for instance, Whyalla we done it in five stages. We’d go over for three weeks, do a stage and then we’d have a ten day break and he would ask you then, would you be available for the next stage, which I would say, yes, ... I wouldn’t take another job because I know that I had to come back within ten days or whatever and I’d be available rather than let him down. I just stayed with Bob Seston.”
Mr Bob Seston had been Mr Drury’s Foreman during his employment with Andreco Hurlls and when Mr Seston moved to the Respondent’s employ as Project Manager, Mr Drury then commenced working from the Respondent as well. Mr Seston and the applicant would often travel together to jobs interstate and it was evident that prior to his termination Mr Seston and Mr Drury had been good friends. Mr Drury gave evidence that he had been Mr Seston’s leading hand on the last eight jobs.
Over the last 15 months Mr Drury had not worked for any other Company. He was asked if he had and replied,
“No, I just went home and sat there and waited for the phone call to go wherever I had to go.”
He was then asked if he was an early starter when projects came along and replied.
“Yes, I was the first one on and as can be checked from the records, I’m the last one off on every job. It’s been the same on every job; the first one on, the last one off.”
In early March 1994 Mr Seston had been involved with bidding for a contract for the Respondent on a Mini Mill Project at Rooty Hill. A Company called Danieli had the main contract to build the Mill, the Respondent’s sub contract was to be the refractory installation. This job was to commence on the 7 April and take about 16 weeks.
It appears that Mr Seston had arranged with Mr Drury to meet him on the 16 March 1994 in order to examine a pump at Tomago. During this meeting Mr Seston asked Mr Drury if he’s was interested in working for the Respondent on the Rooty Hill Mini Mill project. Mr Drury filled out an application for employment and signed and dated it on the 16 March 1994. The form was marked as exhibit 2 and is entitled, “application for employment at the Sydney Mini Mill Project Construction site”. Mr Seston gave evidence that Mr Drury asked him the length of the job and that he had replied 12 to 16 weeks. Mr Seston signed the form as the Companies representative and dated it the 21 March 1994.
On the 25 March 1994 the Applicant attended an induction for the Mini Mill Project at Rooty Hill. At this stage only the Applicant, Mr Seston and Mr Dwyer were involved in the induction as the other workmen were not to come onto the site until after Easter.
It appears that a misunderstanding as to the actual commencement date of employment now arose between Mr Drury and Mr Seston when subsequently Mr Drury received his first pay advice slip. Mr Drury believed that he was to be paid from the 25 March when he completed his induction, thereby receiving payment for the two days of the Easter Break. Mr Seston maintains that Mr Drury was to be paid at casual rates prior to his employment commencing after the Easter holidays and was therefore not eligible for the two days. Mr Drury was asked by his counsel,
“Did you take some action to sort out the confusion around the payslip?”
Mr Drury answered;
“You know, when I didn’t get paid the two days for Easter I went and approached Bob Seston about the two days payment for Easter which I rang the union and I found out I was entitled to and then that was when I noticed that on my first day’s pay in the induction I hadn’t been paid the normal rate. That’s the only time that I found out and like I said, I got that on 21 April. Normally I would get that in the mail the next week, that should have been sent to me in the mail and then I would have seen that it was wrong to start with.”
“And at the same time I also queried the annual leave that I had no hours owing me and I’d worked for them so long and I never had a day off, you know. That was also queried at the same time.”
Mr Drury gave evidence that when he approached Mr Seston with his concerns, Mr Seston said he would look into it. By the next pay period the problem remained unresolved and Mr Drury alleges that Mr Seston then told him that he was not entitled to it and that he was not going to get it.
Relationships between the two men then began to deteriorate at a rapid rate. Mr Drury began to pursue Mr Seston. Mr Seston alleges that Mr Drury called him, “fucking pig-headed and threatened to get the union in to close down the site. On one occasion Mr Seston in an attempt to prove that Mr Drury was not entitled to the two days at Easter had rang Mr Peter Slattery from the Master Builders Association and put Mr Drury on the telephone to him. Mr Seston gave the following description;
“When I paid, Ray got on again about not being paid and that I was fucking pig-headed and that he was entitled to it, so I said, well, I have spoke to Peter Slattery from the Master Builders Association, he’s the industrial relations guy. I said, if you come out of the office I’ll get him on the phone and you can talk to him, like. So Ray said okay, so I took him over the office and I dialled Peter Slattery. I explained to him that - what it was about and I asked him if he could clarify it with Ray Drury about what he was paid and what his entitlement were and the conversation went on. I couldn’t sort of hear what Peter Slattery were saying but Ray got very agitated and started to be argumentative over the phone to Peter Slattery so I took the phone off him and put it down and hung up.”
Several incidents followed this without the problem resolving until on the 29 April. Mr Seston alleges that;
“I was in the site office and at 6:50 Ray Drury came storming in the office and said that - he’s not going to start work until he gets paid for the two public holidays and he’s calling the union; the union will be here on the job to stop it and he said and I’m not fucking God... and he’s going out the door, at the top of his voice he shouts, no wonder your fucking wife left you.”
Later that afternoon Mr Seston called Mr Drury to the office and gave evidence that, the following conversation took place,
“I said I’ve had enough and I’ve had enough of your abuse and I think it’s time you finished up. And Ray Drury immediately answered to me, what about his 8 hours notice? And I said well, I believe under the new terms that you’re entitled to a week, I said and whatever you’re entitled to you’ll get. And he said it’s late, I said it’s 5 to 5, I said it doesn’t make any difference. And he left the site.”
On the 24 May 1994 Mr Drury made application this Court, claiming
(a) and order declaring the termination of employer’s employment of the employee to have contravened Division 3 of Part VIA of the Industrial Relations Act 1988 (“the Act”);
(b)an order requiring the respondent to reinstate the employee in employment; and
(c) an order that the respondent pay compensation to the employee.
Such other order or orders as will put the employee in the same position (as nearly as can be done) as if the employment of the employee by the respondent had not been terminated.
This matter came before the Court on the 7 October 1994 and by way of defence to the Applicants claim the respondent filed a notice of motion seeking orders that the application be dismissed for want of jurisdiction pursuant to regulation 30B (1) (a) and (b) of the Industrial Relations regulations.
Regulation 30 B (1) (a) and (b) is set out hereunder,
30B(1) [Excluded employees] For the purposes of section 170CC of the Act, the following employees are excluded from the operation of Subdivisions B,C,D, and E of Division 3 of Part VIA of the Act:
(a)Subject to sub regulation (2), Employees engaged under a contract of employment for a specified period of time;
b)employees engaged under a contract of employment for a specified task;
The parties filed in Court an agreed set of facts in the following terms;
Ray Drury was employed by BHP to work on its reheat furnace construction project work at the Sydney Mini Mill at Rooty Hill.
An estimate of 12-16 weeks work was given to Mr Drury.
Mr Drury was engaged under the terms of the National Building and Construction Industry Award 1990 together with certain above award entitlements.
It was understood that at the end of the project if Mr Drury was still employed his employment would terminate.
During the hearing counsel for the respondent indicated that he would be relying on the exclusion of “specific task” under regulation 30 (B) 1 (b) rather that 30 B 1 (a) which relates to a contract of employment for a “specified period of time”, however, in relation to Reg. 30 B (1) (a) his argument was two fold.
Firstly he maintained that the judgments of Northrop J, on the 20 September 1994 in COOPER v. DARWIN RUGBY LEAGUE INC. and Van Doussa J, in ANDERSON v. UNBAKUMBA COMMUNITY COUNCIL of the 26 September 1994 were wrong on the basis that their Honours had, read words into the regulations that were not there. In Cooper’s case, Northrop J, held that a contract of employment for a particular time period that can be terminated on notice by either side prior to that period of time ending is not a contract of employment for a, “specified period of time,” for the purposes of Regulation 30B. Von Doussa J in the Anderson case came to the same conclusion and at page 8-9, be expressed the view that,
“Specified period of time” is a period of time that has certainty about it. A contract of employment for a specified period of time would be one where the time of commencement and the time of completion are unambiguously identified by a term of the contract, either by the contract stating definite dates, or by stating the time or criterion by which one or other end of the period of time is fixed, and by stating the duration of the contract of employment. As the period of time is defined in this way, it is apt to refer to a contract of employment for a specified period of time as a contract of employment for a fixed term, although this is not the description used in the Regulation.
A contract of employment to run throughout a nominated number of days, weeks, or years would be a contract of employment for a specified period of time. If the terms of the contract of employment, instead of identifying in this manner the period of time during which it is to run, provides that it is to run until some future event, the timing of the happening of which is uncertain when the contract is made, the contract will be for an indeterminate period of time.”
The second argument put forward by the Respondent’s Counsel was that in Mr Drury’s case there was no provision in the contract of employment with respect to termination. he agreed that an award applied and that award made provision for termination on one days notice, but that award did not become part of the contract of employment (BYRNE [& FREW] v. AUSTRALIAN AIRLINES (TD 52 IR 10).
The applicant argued that although the decision in BYRNE & FREW had placed a question mark on the proposition of certain provisions in awards being incorporated into a contract of employment automatically, it did not exclude the parties from incorporating some or all provisions of the award by agreement. This can be seen in all of the separate judgements.
In the judgment of Keely J (who was in the majority which over-ruled GREGORY v. PHILLIP MORRIS LT (1988) 24 IR 397 which found no automatic incorporation of award provisions into contracts of employment) it was put as follows:
“I agree with the conclusion of Beaumont and Heerey JJ and agree generally with their reasons for the conclusion that this Court should not, with respect, follow the decision of the majority in Gregory (at 421; 478-479) that the “award provision imports a term into the contract of employment independently of the intention of the parties” (emphasis added)(p 23)
Beaumont and Heerey JJ put it as follows:
Moreover, since awards will always operation alongside employment contracts, or in a contractual milieu, there is logic in imputing to the legislature the assumption that it is a mater for employer and employee to agree whether award provisions are to be expressly incorporated into the contract - as for example occurred in True - and thus create contractual remedies in case of breach. (emphasis added) (p. 55).
Further, where Beaumont and Heerey JJ were seeking to distinguish the circumstances of True’s case to that before them stated as follows:
The reason the contract contained terms as to wages which were the same as the comparable provisions of the award [in True’s case] was not that the award imported those provisions into the contact, but that in the particular circumstances of the case the parties expressly agreed that their contract would include the award provisions (see also the above passage from the judgment of Dixon J where his Honour speaks of the “express promise to pay award wages”)(p.43)
Further,
”Consistently with this analysis, parties to an employment contract may expressly agree (as they did in True) to incorporate the terms of an industrial award into their contract. If they do, the terms of the award become part of the contract, because the parties have so agreed...(p.44)”.
The contracts of employment between Mr Drury and BHP, in the past and in the present case can only be described as somewhat loose in nature. The reason for this can no doubt be attributed to the informality and friendly working relationship that had developed between Mr Drury and Ms Seston over the years. However, from the evidence given it became clear that in this case it was common ground that their existed an understanding that the contract included provision of a term for notice of termination by either party. Mr Seston, in evidence as to the termination of Mr Drury’s employment said,
“And Ray Drury immediately answered me, what about his 8 hours notice? And I said well, I believe under the new terms that your entitled to a week”.
As the contract of employment included a provision for termination on one days notice or one weeks notice by either party and the period of duration of the contract was uncertain then the exclusion pursuant to Regulation 30 B (1) (a) is not available as a defence to the Respondent.
The principal defence relied upon by the Respondent was that Mr Drury was employed to perform a specific task and is therefore excluded from bringing a claim pursuant to Regulation 30 B (1) (b).
I am satisfied that this defence must also fail on the basis of the principle expounded in COOPER v. DARWIN RUGBY LEAGUE and ANDERSON v. UMBAKUMBA COMMUNITY COUNCIL. However, I am not of the view that Mr Drury was employed under a contract of employment for a specified task.
The sub-contract entered into between Danili and the Respondent was a contract for a specified task i.e. to construct the furnace. This of course does not mean that any employee of the Respondent engaged on work connected with the construction of the furnace would also be employed on the basis a specific task contract. In fact Mr Drury had an established pattern of work with the Respondent moving from project to project before the final completion of the tasks involved. His employment was that of a bricklayers labourer, an employee of the respondent and not a sub-contractor employed to complete a specified task such as the complete installation of the furnace.
It would appear that the exclusion of employees engaged under a contract of employment for a specified task was designed to prevent “independent contractors” from bringing claims under the Industrial Relations Act 1988. If this is the case then the respondent would need to establish that an applicant was not an employee. There can be no argument in the present case that Mr Drury was an independent contractor as there has already been agreement that he is an employee of the Respondent.
The Termination
There was some confusion throughout this matter as to the reasons for Mr Drury’s termination, however, it was clear that what caused this sorry affair was his dogged pursuit of the two days pay for the Easter break. The following different reasons were given at different times,
(a)On the “Warning Notice” (exhibit 7) the problem is stated as verbal abuse of Mr Seston, undermining Seston’s authority, and causing disharmony on the project.
(b)The letter of termination (exhibit 8) does not give any reason for the dismissal, but indicates that a week in lieu of notice was being paid;
(c)The first Employment Separation Certification (exhibit 9) indicates “shortage of work” as the reason, and indicates that “misconduct” was not the reason for dismissal.
(d)The second Employment Separation Certificate (exhibit 12) indicates “misconduct” as the reason for dismissal.
(e)The Respondent’s Affidavit puts “misconduct” as the reason and particularises that as follows:-
(i)repeated verbal abuse of the supervisor;
(ii)a failure to respond to counselling;
(iii)a failure to heed both verbal and written warnings about his conduct.
(f)In his evidence Mr Seston said the reasons were the same as for (a) above, but emphasised alleged abuse and undermining of authority.
There can be no doubt that Mr Drury’s conduct and abuse of Mr Seston was such that in ordinary circumstance would justify dismissal but in Mr Drury’s case there are special circumstance that place this case within Section 170 DE (2) of the Act. These special circumstances are as follows;
(a)Mr Drury and Mr Seston had worked together for over 20 years and had established a close relationship.
(b)In light of the previous close relationship between mr Drury and Mr Seston the problem between them should have been delegated to an independent person.
(c)Mr Seston made no attempt to arrange a meeting with the union representative to establish, once and for all that Mr Drury’s claim was not valid.
(d)Mr Seston had contributed to the problem by taking the telephone out of Mr Drury’s hand and hanging up when he was talking to Peter Slattery from the Master Builders Association and telling Mr Drury that if he did not stop pursuing his claim he would be sacked.
(e)The bad language used by Mr Drury cannot be regarded as misconduct in light of his work environment.
(f)Mr Seston failed to offer Mr Drury procedural fairness.
(g)But for Mr Drury’s pursuit of his perceived entitlements this situation would not have occurred
Procedural and Substantive Fairness
Mr Seston clearly failed to implement the disciplinary procedure relied upon by the Respondent prior to termination of an employee. Mr Drury was in fact terminated on the same day he received his second written warning. The warning form itself indicates, “first, second etc. final warning”, and the word second had been circled by Mr Seston.
Judicial Registrar Parkinson in the matter of AWU-FIME AMALGAMATED UNION & JOSEPH PATRICK FARREL v. CONAGRA WOOL P/L.No. VI 162/94 heard on 22 to 25 August 1994 was of the opinion that the application of a disciplinary procedure may well be a telling indicator of procedural fairness being accorded by an employer. She stated further, that:
“In this case, it is possible that the terms of the disciplinary procedure did in fact become incorporated into the contract of employment between the applicant and the respondent. however even if this were not the case, the adoption of such procedures imposes as a matter of fairness and equity an obligation on the employer to apply and comply with those procedures if it is proposed to rely upon them to bring about the termination. Once adopted and implemented in a workplace, their status is more than merely a discretionary approach available to an employer at whim.”
The failure of Mr Seston to comply with the companies disciplinary procedure plus the added fact that Mr Seston should have stood aside or delegated the procedure to a more senior, independent person, satisfies me that the termination was in contravention of Section 170DE of the Act.
In dealing with the substantive aspects of this claim it is necessary to consider the misconduct allegations in relation to Mr Drury in light of the fact that despite his persistence to resolve the claims for the two days pay for the Easter break and his holiday entitlements, the respondent had failed to satisfy him that his claims were not justified. There was no evidence by either party as to whether Mr Drury’s claims were baseless, but there can be no doubt that he was genuinely of the belief that he had an entitlement and that he was being fobbed off by Mr Seston.
Section 170 DF(1) of the Act sets out various reasons for which employees are not to be terminated. Although none of these reasons can be applied to the circumstances surrounding the dismissal of Mr Drury, sub section (e) may be extended to cover situations where an employee is seeking self help with regard to his or her rights over entitlements.
S170 DF(1) (e) is as follows,
“The filing of a complaint, or the participation in proceedings, against an employer involving alleged violations of laws or regulations or recourse to competent administrative authorities (emphasis added)
It could have been argued by the Applicant in this case, that Mr Drury’s pursuit of his entitlements, was equal to participation in proceeding against an employer involving alleged violation of laws or regulations. I do not agree that in this case it was, however, where there is a termination of an employee on the basis of misconduct and that conduct is causally connected with the employee attempting to claim his or her entitlements and that employee has given lengthy, loyal and efficient service, then the employer must make sure that every avenue of procedural and substantive fairness has been afforded to a employee before any termination is considered. In Mr Drurys’ case there was not.
Having determined this matter in favour of the Applicant, the question of remedy, as discussed at the hearing on 8 December 1994 will be dealt with on a date as arranged by the Applicant, convenient to both parties.
I certify this and the preceding fourteen (14) pages are a true copy of the Minutes of Order of Judicial Registrar Walker.
Associate : Jeynelle Moffat
_________________
Date : 17 January 1994
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