Coward, Andrew v Gunns Veneer Pty Ltd

[1997] FCA 1341

FEDERAL COURT OF AUSTRALIA

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - alleged UNLAWFUL TERMINATION - CONDUCT and PERFORMANCE - VALID REASON - theft from fellow employee’s car adjacent to workplace - whether sufficient connection to employment - whether breach of EMPLOYMENT CONTRACT - employee denying involvement then admitting matter - whether SERIOUS MISCONDUCT - NOTICE OF TERMINATION.

Workplace Relations Act 1996 (Cth) ss 170DB, 170DE, 170EE

McManus v Scott-Charlton (1996) 140 ALR 625
Re Greenleaf Fertilisers Limited (unreported, Industrial Commission of New South Wales, Liddy J, 28 June 1978)

Wadey v Y.W.C.A. Canberra (Industrial Relations Court of Australia, Moore J, 12 November 1996, unreported)

Kenefick v Australian Submarine Corporation Pty Ltd (1995) 62 IR 107
Warner v Commissioner of State Revenue (unreported, Industrial Relations Court of Australia, R Farrell JR, 16 September 1997)

ANDREW COWARD v GUNNS VENEER PTY LIMITED
TG 14 of 1997

MURPHY JR
BURNIE
13 NOVEMBER 1997

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	TG 14  of   1997

BETWEEN:	ANDREW COWARD APPLICANT
AND:	GUNNS VENEER PTY LIMITED RESPONDENT
JUDGE:		MURPHY JR
DATE OF ORDER:		13 NOVEMBER 1997
WHERE MADE:		BURNIE

THE COURT ORDERS THAT:

1. The respondent, pursuant to s 170EE(5) of the Act pay to the applicant damages in the sum of $1,425, less any amounts applicable to that sum paid on the applicant’s behalf to the Australian Taxation Office.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	TG 14 of 1997

BETWEEN:	ANDREW COWARD APPLICANT
AND:	GUNNS VENEER PTY LIMITED RESPONDENT

JUDGE:	MURPHY JR
DATE:	13 NOVEMBER 1997
PLACE:	BURNIE

REASONS FOR JUDGMENT

INTRODUCTION
The applicant seeks reinstatement to his position as a driver/operator with the respondent.  He commenced employment in February 1993.  His employment was terminated on 23 October 1996 as a sequel to an incident which occurred about three weeks earlier when the applicant removed a radio aerial from a vehicle owned by a fellow employee, Mr Dennis Latimer. 

The issues in the proceeding were:  first, whether the respondent had a valid reason to terminate the applicant's employment;  second, if not, whether reinstatement was impracticable;  and third, whether the respondent was entitled to terminate the applicant's employment without notice. 

THE EVIDENCE
In early October 1996, the applicant left the workplace with another employee, Mr Barker.  They were in Mr Barker's vehicle.  They had clocked off at two-thirty pm.  As they drove past Mr Latimer's vehicle, Mr Barker suggested taking the UHF aerial from the vehicle.  The applicant claimed that Mr Barker said it was as a joke.  The applicant unscrewed the aerial and threw it into the back of Mr Barker's vehicle.  Mr Latimer's vehicle was parked on a road adjacent to one of the entrances to the factory.  The two were apparently observed in the act.  A couple of days later Mr Latimer approached both employees and asked where his aerial was.  In Mr Latimer's words, "both virtually denied it".

The applicant's evidence was that he told Mr Latimer that he did not have it.  Mr Latimer mentioned the matter to Mr Gary Pearce, the production supervisor, but did not take the matter further.  He did approach the local police on two occasions.  About three weeks later Mr Pearce raised the matter.  The site manager, Mr Vernham, then called a meeting at which the applicant and Mr Barker were present.  The union shop steward, Mr Hodgetts, was called.  The two were asked about the incident, and both denied it on a number of occasions.  Eventually Mr Barker admitted it was in the boot of his car.  A short time after this the applicant admitted his involvement.  Mr Vernham, who had earlier advised both that he took a serious view of stealing from a fellow employee, advised both that their employment was terminated.

Mr Vernham's evidence was that going into the meeting he was prepared to give both employees a written warning had they made full admissions and apologised.  When they had "lied and lied" to him, he took a serious view of it.  On his version, after discussing the matter with Mr Hodgetts, he determined to dismiss them.  He noted that there had been a previous incident with the applicant, who had removed two cables from the premises without authority.  The applicant had been confronted by Mr Vernham.  He had admitted the matter, returned the items, and the matter was left on that basis.

The applicant's evidence was that the incident involving the aerial was a practical joke.  He said he had not given any explanation of the matter in the meeting except to that effect.  He did not explain the nature of the practical joke.  He did not apologise.  He said that a couple of people had raised the matter of the aerial at the workplace.  He said that he thought Mr Barker may have said something to Mr Latimer on the day of the incident.  He admitted that he may have received a copy of a procedures manual that referred to stealing being a dismissible offence.  He said he regarded himself as lucky in relation to the incident involving the cables. 

DID THE CONDUCT HAVE A RELEVANT EMPLOYMENT CONNECTION? 
The first issue is whether the applicant's conduct had a relevant connection with his employment so as to provide a justification for his termination. The respondent carries the onus of proof on this issue: ss 170EDA(1) and 170DE(1) of the Workplace Relations Act1996 (Cth) (“the Act”). I was referred to a number of authorities on the matter. The cases suggest that there must be relevant connection between the conduct and the workplace. Another formulation may be to ask whether the conduct breached the implied duty of confidence and trust between the employer and employee. In McManus v Scott-Charlton (1996) 140 ALR 625, Finn J was dealing with workplace sexual harassment. At 636, in a comment that has general application, he said this:

“Secondly, once an employee's conduct can be shown to have significant and adverse effects in the workplace, because of its impact on workplace relations, on the productivity of others, or on the effective conduct of the employer's business, that conduct becomes a proper matter of legitimate concern to an employer and does so because of its consequences.”

He went on to note that in Re Greenleaf Fertilisers Limited (unreported, Industrial Commission of New South Wales, 28 June 1978), Liddy J had held that an employee had an implied contractual duty to the employer to act in a reasonable manner towards his fellow employees.

Here it was submitted by counsel for the applicant that there was insufficient connection.  He submitted that the incident took place outside the workplace and outside the applicant's working hours.  Further, it had no bearing on the applicant's ability to perform his duties because he was not employed in any position of trust.

I am unable to accept the submission.  There was a significant connection between the incident and the applicant's employment.  The applicant's own explanation was that Mr Barker said "let's take the aerial off as a joke".  Mr Latimer was still working at the time on that day.  The two employees worked with Mr Latimer.  They had just clocked off.  Mr Latimer’s utility was parked just outside the respondent's premises.  The two employees had a continuing relationship with Mr Latimer by reason of all being employed at the same premises.  The opportunity that both had to take the aerial arose out of them clocking off at a time earlier than Mr Latimer.  There was ample connection between the employment and the incident. 

A further connection is provided by the implied duty of employees inter se to respect each other's property.  Employee theft of other employees’ belongings has a significant effect on workplace morale.  The duty of an employee to respect the property of other employee's within and about the workplace is an aspect of the implied duty of good faith and fidelity owed by each employee to his or her employer. 

VALID REASON
The next issue is whether the respondent's decision to dismiss the applicant for his involvement in the incident was for a valid reason under s 170DE(1) of the Act. Mr Vernham's evidence was that he takes the matter of theft of fellow employees’ property very seriously. The respondent is entitled to do that. It is not for the Court to substitute its opinion for that of the employer on the matter.

Here the applicant had adequate opportunity to exculpate himself from the incident.  He denied it to Mr Latimer a couple of days after the incident.  He maintained his silence until the meeting of 23 October.  I give little weight to the suggestion that this was a practical joke.  It had gone well beyond that by the time Mr Vernham intervened.  In the meeting with Mr Barker, the applicant maintained his denial.  When Mr Barker recanted, still the applicant persisted until he too admitted his involvement.  Even then he was not forthcoming with an apology.  In the face of this course of action the respondent had a valid reason to terminate his services.  The respondent's actions could not, to put the matter in the negative, been seen as outside the range of rational and reasonable views of the applicant's conduct:  see Wadey v Y.W.C.A. Canberra (Industrial Relations Court of Australia, Moore J, 12 November 1996, unreported).

Further, the decision was a logical response to the applicant's conduct.  In Kenefick v Australian Submarine Corporation Pty Ltd (1995) 62 IR 107 at 116 Wilcox CJ said:

“[I] think it follows that the reason must be genuine, that there must be a causal relationship between the reason and the termination and that the termination must be a logical response to the employee's capacity or conduct or the employers operational requirements. Of course, there is often more than one logical way of dealing with a problem.  While the subsection [s 170DE(1)] requires the employer to establish that the termination was a logical way of dealing with the problem of employee capacity or conduct, or operational requirements, that gave rise to it, it does not require proof that this way the only logical course.  The subsection was designed to inhibit capricious terminations, not to put the Court in the employer's managerial chair.”

The respondent has discharged its onus of proof. There has been no breach of s 170DE(1) of the Act.

DID THE RESPONDENT BREACH S 170DB OF THE ACT? 
I have upheld the validity of the respondent's decision to dismiss the applicant. A different issue arises as to whether the respondent was entitled to dismiss the applicant without notice. For the respondent to be able to do so, it must satisfy the test in s 170DB(1)(b) which provides:

“the employee [must be] guilty of serious misconduct, that is, misconduct of a kind such that it would be unreasonable to require the employer to continue the employment during the notice period.”

Here it is significant that the applicant's performance was satisfactory.  Mr Gary Pearce, the production supervisor, knew of the incident immediately after it occurred.  The applicant continued to work for the next three weeks.  Mr Vernham, prior to the meeting, was prepared to let the applicant off with a warning had he owned up. 

In the circumstances, while I am satisfied that the applicant was guilty of misconduct that provided a valid reason for his dismissal under section 170DE(1) of the Act, I propose to follow Warner v Commissioner of State Revenue (unreported, Industrial Relations Court of Australia, R Farrell JR, 16 September 1997), and I hold that there has been a breach of s 170DB(1) by reason of the failure to pay the applicant in lieu of notice.

The applicant had been employed for over three years.  He should have been paid three weeks pay in lieu of notice.  He gross wages were $475 per week.  Three weeks pay comes to $1425.  I will order that the respondent pay that amount to the applicant, less any applicable taxation.

ORDERS:

1. The respondent, pursuant to s 170EE(5) of the Act, pay to the applicant damages in the sum of $1,425, less any amounts applicable to that sum paid on the applicant’s behalf to the Australian Taxation Office.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of  Judicial Registrar MURPHY.

Associate:       KAREN HALSE

Dated:            13 November 1997

Counsel for the Applicant:	MR L HARPER
Solicitor for the Applicant:	JENNINGS ELLIOTT
Counsel for the Respondent:	MR A CAMERON
Solicitor for the Respondent:	TCCI
Date of Hearing:	13 NOVEMBER 1997
Date of Judgment:	13 NOVEMBER 1997