Construction, Forestry, Mining and Energy Union v Kodak (Australasia) Pty Ltd
[1994] IRCA 156
•12 December 1994
C A T C H W O R D S
INDUSTRIAL LAW - termination of employment - procedural fairness - substantive reason - reasonableness - order for compensation.
INDUSTRIAL RELATIONS ACT 1988, ss 170DC, 170DE, 170EA, 170ED(a), 170EE
Nicholson v. Heaven & Earth Galleries Pty Ltd (unreported 20/9/1994)
GLEN PETER MARK POLLEY -v- BEASAM PTY LTD NO. AI 131 OF 1994.
Before : Linkenbagh JR
Place: Canberra
Date: 12 and 13 December 1994
IN THE INDUSTRIAL RELATIONS COURT )
OF AUSTRALIA )
AUSTRALIAN CAPITAL TERRITORY )
DISTRICT REGISTRY ) No. AI 131 of 1994
GLEN PETER MARK POLLEY
- Applicant
BEASAM PTY LTD
- Respondent
MINUTES OF ORDER
BEFORE: JUDICIAL REGISTRAR LINKENBAGH
DATE: 13 DECEMBER 1994
PLACE: CANBERRA
THE COURT ORDERS THAT:
1.That the termination of the employment of Glen Peter Mark Polley on 9 June 1994 contravened Division 3 of Part VI A of the Industrial Relations Act 1988.
2.That the respondent pay to Glen Peter Mark Polley the sum of $14,000.00 by way of compensation within fourteen days of 13 December 1994.
IN THE INDUSTRIAL RELATIONS COURT )
OF AUSTRALIA )
AUSTRALIAN CAPITAL TERRITORY )
DISTRICT REGISTRY ) No. AI 131 of 1994
GLEN PETER MARK POLLEY
- Applicant
BEASAM PTY LTD
- Respondent
BEFORE: JUDICIAL REGISTRAR LINKENBAGH
DATE: 13 DECEMBER 1994
PLACE: CANBERRA
REASONS FOR JUDGMENT
Delivered extempore and revised from the transcript
This is an application filed by the applicant on 1 July 1994 seeking orders under the Industrial Relations Act 1988 that the termination of the employer's employment of the employee on 9 June 1994 contravened Division 3 of Part VI A of the Act. The applicant also sought an order requiring the respondent to reinstate him and an order that the respondent pay compensation.
At the commencement of the hearing the applicant foreshadowed that he was not seeking reinstatement but was arguing rather that reinstatement was impracticable and that compensation was the appropriate order. In the light of the facts as I have found them I have no difficulty in agreeing with the applicant's submission that reinstatement is certainly impracticable.
The facts of the matter are that the applicant was employed as an Area Manager for the respondent between 5 October 1993 and 9 June 1994. His duties were
many and varied and included managing the Fyshwick Self Serve Service Station which was part of the respondent's business.By May 1994 his duties included his acting as a courier for the company's banking, taking the banking on an almost daily basis from the company's depot at Fyshwick to the ANZ Bank branch at Queanbeyan. There was no issue in the proceedings at all that the applicant's performance of his duties was other than good. Detailed evidence was given as to the procedure relating to the collection and banking of money collected in the course of the respondent's business. The sources of the money were at least three service station sites and there were other sources within the respondent's business operations including its depot and other business which it appears to have conducted on behalf of Shell Australia.
The service station takings were balanced against the record of cash register takings at each service station site at the end of each day and those takings were placed in a safe. On the following day they were again balanced at the service station and then taken to the depot for entry on a data base. The computer produced a printout two copies of which accompanied the money to the bank. The money and cheques and other documents which went with the printout to the bank were bundled up and had an elastic band placed round them were put inside either an envelope or a calico bag and then placed inside a black briefcase which was kept in the office at the depot.
The procedures relating to the money in the office at the depot were carried out by an employee who was different from the applicant. The duties at the service station were sometimes done by the applicant, and almost always with the assistance of another employee. The applicant was familiar with all stages of the procedure but at the depot he was not part of the procedure. After the procedures were carried out at the depot and the banking was placed in the brief case, the brief case was left on the floor near a desk in the main office usually for several hours each day and other banking business was added to the brief case during the day.
The applicant's practice was to arrive at the depot at about 3.30, and pick up the brief case and take it to the bank. He drove to the bank and on arrival at the bank he presented the bundles of banking to the commercial teller, one by one, and received a stamped copy of the computer printout as a receipt for each bundle of money. Other banking business sometimes involved a deposit book and in those instances the applicant received a stamped copy deposit slip with the book. He returned the documents stamped by the bank to the depot. It is significant that the bundles were not identifiable as to their source except that once the printout was unfolded it could be seen that it was itemised as to the source of each sum of money which was banked.
The number of bundles in the banking brief case varied between two and twelve on any particular day. The banking procedure in relation to the other service stations conducted by the respondent followed a similar procedure, each ending with a bundle of banking in the brief case. Not all of the sources of banked funds provided banking each day and that is why the number of items to be banked on any particular day varied. It is significant that the respondent kept no inventory of what went into the briefcase and there was no way the person doing the banking could know how many bundles or items of banking he or she had in the briefcase during the trip to the bank. There is equally no way that that person could know if any of the bundles had gone missing from the briefcase. The briefcase was not secure, and the office was accessible by employees and visitors to the depot.
The applicant had drawn the attention of management to what he regarded as inadequate security in relation to the briefcase but there had been no changes implemented and he had been told that all the employees were persons who were trusted and that, in effect, there was no security risk. The applicant himself did not have the power to change any of those procedures nor was he given any training in the specific procedures which he was to follow in relation to the banking.
Another significant matter is that the respondent had not seen fit to implement any check on the returning stamped receipts from the bank, in that, there was no comparison done on the return of the applicant from the bank to ensure that he had brought back from the bank a receipt for all of the items or bundles which he had taken to the bank.
On 27 May 1994 the company informed the applicant that the Fyshwick Self‑Serve Service Station banking bundle for 19 May 1994 had not been banked. That bundle has never been located, in spite of a police investigation and an internal investigation by the respondent. Following that, the applicant suggested to the respondent that a list be made each day of the items of banking so that there could be some independent record of what had been placed in the brief case. That was not done. On 2 June the company discovered that the Fyshwick Self-Serve Service Station bundle of banking for 26 May had not been banked and there was a further investigation. It has not been located.
On 7 June the applicant observed, whilst doing the banking at the bank, that the Fyshwick bundle was again not with the banking and on that occasion he made a phone call to the depot and was informed that the bundle had been overlooked and was in the safe at the depot. On 8 June the respondent implemented a procedure
of providing a list of the items of banking and introduced a more secure system. Both of the bundles of banking that went missing included two day's takings from the Fyshwick service station and involved a total amount of $13,638.15 and the respondent has sustained a loss in that amount.
On 9 June the applicant was requested to attend a meeting with three senior managers of the company. The evidence is that the company had made a decision to dismiss the applicant and had called this meeting for the purpose of seeing whether the applicant could come up with any new explanation or new information which might change the course of the decision which the company had made. The persons representing the respondent at that meeting decided that the applicant had not presented new material and confirmed the action to dismiss. No police action has been taken against any person in relation to the missing bundles of money. It is not the respondent's case that the applicant stole the bundles of money.
The respondent's case is that the applicant's failure to notice that the Fyshwick Self-Serve Service Station banking was not in the brief case on 19 May and 26 May demonstrates "disinterest or incompetence at a level tantamount to misconduct". That is the very narrow ground on which the respondent bases its case in these proceedings.
There are two aspects of proceedings under this part of the Act and they are the questions of procedural fairness and substantive reason. The Chief Justice of this Court, in a decision which has not yet been reported of Nicholson v Heaven and Earth Gallery Pty Limited, on 20 September 1994, summarised the reason behind the provision of section 170DC in the Act and his Honour said this:
The relevant principle is that a person should not exercise legal power over another, to that person's disadvantage and for a reason personal to him or her, without first affording the affected person an opportunity to present a case.
The procedural aspects of this matter do not, in my view, in any way, indicate that the respondent complied with the provisions of section 170DC. As I have said, the respondent made the decision to terminate and then called a meeting with the applicant, of which he was given about half an hour's notice and the purpose of that meeting, even on the respondent's case, was not to present the allegations to him and give him the opportunity to explain or to give him time to consider his position and to make a proper response. The respondent's evidence is that the purpose of that meeting was to see whether the applicant could come up with anything new and when he did not, the decision to terminate was confirmed.
For that reason I find that the employer is in breach of its obligations under section 170DC. The substance of this matter, is, as I have said, very narrow, as far as the respondent is concerned. The respondent's case is that the applicant should have noticed that the Fyshwick banking was not amongst the bundles of banking which he presented at the ANZ Bank on the two days. The evidence indicates that it was not part of the applicant's duties to check in detail, or to check at all, the content of the banking. The applicant told the Court that his doing the banking was a routine duty in which he had the capacity of a courier. He had no reason to suspect that there was any irregularity concerning the contents of the brief case and this was part of his work which he did every day as a matter of routine. The respondent had no procedure which provided a check on the receipts which were returned to the depot by the bank and the earliest opportunity which the respondent provided to itself to ensure that the banking had been carried out without irregularity was a few days later when another employee carried out a reconciliation between the company's records and the bank's statement.
The respondent put to the Court that its expectation was that the applicant would have noticed that the banking from the service station which he managed was missing on both days. It is to be remembered that the applicant had nothing to do with the banking from his own service station after it left the service station and was delivered to the depot. He had no control over the entry of the data onto the computer at the depot and he did not take part in bundling up the money and putting it into the brief case.
The respondent also argued that the applicant should have know that the banking for Fyshwick on these particular days was a larger sum and therefore a larger bundle than usual, because it involved two days banking. There is no evidence to support that and if there was evidence that is evidence which surely would have been within the knowledge and ability of the respondent to place before the court. The respondent in arguing that the applicant was not observant is in the opinion of the court requiring the applicant to be observant beyond the call of his duty. The respondent has made presumptions about the knowledge that the applicant had or ought to have had about the amount of the banking for his service station on these days. There is no evidence to support these presumptions or the conclusions which the respondent asks the Court to draw.
The respondent, whilst it criticises the applicant for failing to be observant, is guilty of some inadequacies in its system which are detailed in the document entitled Theft Report which is before the Court as exhibit 4. That document identifies what the company describes as "Control Weaknesses". Those weaknesses are the weaknesses which I have already described in the company's procedures, particularly the location of the black brief case in the depot office and the lack of security in relation to the brief case.
It is unfair to the applicant to criticise him as has been done by the respondent for a lack of management abilities when the respondent's other management procedures are far from perfect. It appears to the Court that no other persons in managerial capacities in the respondent's organisation have been called to task for the short comings in their management abilities which are illustrated in the list of Control Weaknesses in exhibit 4. The Act uses the word "reasonable" frequently and if a respondent is to come before the court and argue that its actions in relation to a particular applicant are reasonable then one of the tests of that reasonableness must be to look at the respondent's procedures and attitudes which are reflected in its treatment of other persons in similar capacities in the same organisation.
Further, on the substance of the matter, it is noted that although the applicant from time to time made suggestions to the respondent about improving security procedures, those suggestions were not followed up by the respondent. The respondent did not act swiftly once the first incident came to its notice. Pursuant to the provisions of section 170DE, the reason for termination must be a valid reason and is not a valid reason if it is unreasonable. Section 170ED(a) which came into effect on 30 June 1994, reverses the onus of proof in relation to the validity of reasons, placing the onus on the respondent.
In my view that does not substantially alter the position that existed prior to 30 June but rather spells it out and makes it more clear. There is no real conflict in this matter as to the facts. The difference between the parties is the interpretation which the respondent puts on the failure by the applicant to notice the absence of the bundles of banking at the Bank at the relevant times. For all of those reasons I conclude that there has been a contravention of Division 3 of Part VI A of the Act and I turn to the question of the remedy which is available for the applicant pursuant to the provisions of section 170EE.
That remedy, given that reinstatement is impracticable, is compensation, and it is to be remembered that compensation does not equate with the ordinary legal concept of damages but is rather compensation to put the employee as far as is possible in the same position as he would have been had he not been unfairly dismissed. This applicant now has another job as a real estate commission agent. His income is substantially smaller but has the capacity to increase. However, it may take two years for his income to reach a comparable position to that which he enjoyed under the salary and benefits arrangements which he had with the respondent. Unfortunately for the applicant his application was filed on 1 July 194 and he is subject to the restricted provisions in relation to compensation which came into effect on 30 June 1994. Exhibit B details the amounts which the applicant is out of pocket as a result of having to establish himself in his new career with Leader Real Estate.
In real terms the applicant is substantially worse off and he has lost the security of permanent employment and a regular salary, and the benefits of the provision of a motor vehicle and uniform. He has lost some measure of his reputation, the extent of that is difficult to gauge and is not an element which the Court can compensate for in any real terms. Nevertheless this applicant has been severely disadvantaged by the actions of the respondent and in the exercise of the discretion which I have under section 170EE(2) I determine that the appropriate amount of compensation in all of the circumstances is $14,000 and I order that that amount be paid within 14 days.
The orders that I make will be:
1.That the termination of the employment of Glen Peter Mark Polley on 9 June 1994 contravened Division 3 of Part VI A of the Industrial Relations Act 1988.
2.That the respondent pay to Glen Peter Mark Polley the sum of $14,000.00 by way of compensation within fourteen days of 13 December 1994.
I certify that this and the preceding 9 pages are a true copy of the reasons for judgment of Judicial Registrar Linkenbagh.
Date:
Solicitors for the Applicant: Meyer Boettcher & Clapham
Counsel for the Applicant: Mr Hugh Selby
Solicitors for the Respondent: Freehill Hollingdale & Page
Counsel for the Respondent: Mr Watson
Date of hearing: 13 December 1994
Date of judgment: 13 December 1994
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