Dennis Ian Broomby v Boral Timber Tasmania Limited

[1995] IRCA 270

IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA  T1 189 of 1994
TASMANIA DISTRICT REGISTRY

B E T W E E N:

DENNIS IAN BROOMBY
Applicant

A N D

BORAL TIMBER TASMANIA LIMITED
Respondent

TI 190 of 1994

B E T W E E N:

LEWIS DOUGLAS COOPER
Applicant

A N D

BORAL TIMBER TASMANIA LIMITED
Respondent

TI 191 of 1994

B E T W E E N:

DENNIS MICHAEL WELLS
Applicant

A N D

BORAL TIMBER TASMANIA LIMITED
Respondent

IN THE INDUSRTIAL RELATIONS COURT
OF AUSTRALIA  TI 192 of 1994
TASMANIA DISTRICT REGISTRY

B E T WE E N:

DAVIS KEITH GILLIES
Applicant

A N D

BORAL TIMBER TASMANIA LIMITED
Respondent

Reasons for Judgment

19 June 1995  PARKINSON JR

This decision is made in relation to four separate applications pursuant to S170EA of the Industrial Relations Act 1988 (“the Act”). The factual circumstances which gave rise to the termination of employment is the same in respect of each applicant and the parties agreed that the matters would be conveniently heard together.

Each applicant in these proceedings was employed by the respondent as a weighbridge operator at its Longreach woodchip mill. The employment of each of them was terminated by the respondent on 12 October 1994.  The reason for the termination of the employment was the discovery by the respondent of major discrepancies in the nature and description of logs being delivered by one logging contractor in the period when the applicants were on duty in the weighbridge. Extensive evidence was called over eight sitting days, with written submissions being filed on behalf of both the respondent and the applicants.  The following persons gave evidence in the proceedings:
Dennis Ian Broomby     -       applicant
Damien Ernest Arkley   -       team leader, enterprise consultative   committee (“EEC”)
Gary John Preece          -       plant operator, Boral Forest Resources
Gary Wayne Jago         -       production timber worker, Boral Forest   Resources
Danny Jeffrey Peat       -       plant operator and member of the EEC
Dennis Michael Wells    -       applicant
Lewis Douglas Cooper  -       applicant
David Keith Gillies       -       applicant
Douglas Keith Bowen    -       logging contractor
Stuart Douglas Hesketh -       forest manager, Boral Timber
Ross Frederick Waining -       operations manager, Boral Timber
Justin O’Dowd             -       industrial relations consultant
Allen Bruce Dagger       -       general manager, Boral Timber        

It is appropriate to set out in some detail the background and my findings of fact in relation to the circumstances of the employment terminations. I will then turn to deal with the question of the validity of the reason for the termination and other issues arising pursuant to S170DE(1) and (2) and S170DC of the Act.

Background and findings of fact
The applicants Messrs Broomby, Cooper, Wells and Gillies had each been employed by the respondent for significant periods of time. All had lengthy employment histories with the respondent and had previously been employed in various areas of the respondent’s timber mill and woodchip operations at Longreach, Tasmania. Notwithstanding their employment history they were relatively new at the weighbridge, having been trained and appointed to the positions in January 1994. Their appointments to the weighbridge had occurred as a result of vacancies arising consequent upon a voluntary redundancy program implemented by the respondent.

The weighbridge operators work substantially on their own and without supervision, with one operator covering each shift, aside from at changeover times when there is an overlap of approximately one hour. Apart from relief operators drawn from other parts of the mill as necessary, the applicants were the only weighbridge operators employed by the respondent at the time of the termination of their employment.

The weighbridge operators have the responsibility of weighing-in loads of timber supplied by the respondent’s logging contractors. In addition to weighing-in the loads, they were required to assess the loads for diameter size and the presence of rot and other characteristics.  The evidence was that the duties of the weighbridge operator require that they leave the weighbridge office and check each load as it comes through for the above characteristics.

Performance of the duties required that the operator measure the diameter of logs if there was any doubt as to the description of the size of the load.  The duties of the weighbridge operator were spelt out in a handbook which was Exhibit Y5, and whilst this document, described as a training module, was created after the termination of the applicants’ employment, I am satisfied that it adequately and comprehensively describes the responsibilities of the job of weighbridge operator at the time of the applicants’ employment.  Further each of the applicants acknowledged these responsibilities, and their evidence was that in the main these tasks were performed by them in the manner specified in Exhibit Y5. The document specifies clearly the requirement that the operators inspect and carefully assess each load coming across the weighbridge.

Logging contractors are paid an amount per tonne for the logs they supply, according to the size and nature of the log.  In general logs are designated as falling within three categories:  Over 65cm, Under 65cm and Under 30cm in diameter. The logs are categorised by reference to the diameter of the log. The cartage contractor rate of payment is also referenced to the weight of the load. The respondent pays its contractors more for logs under 30cm than for those under 65cm or greater. This is because whilst these logs represent newer growth than the larger diameter logs, they require a greater effort to recover from the forest than the older and larger trees. The evidence is that for a contractor to be paid for either Under 30cm or Under 65cm categories, all of the logs in that load must fall into that category. Loads of this type were not to be mixed. There was in the proceedings some dispute as to the position in relation to logs which had been split by the contractor.

Each of the applicants conceded that he was aware or assumed that the contractors would be paid more for Under 30cm logs.  Further each of them acknowledged that the position of weighbridge operator was a position of trust, involving the only real supervision on behalf of the respondent of the  nature and type of loads being brought in by the contractors.

At issue in these proceedings is the anomalous pattern of delivery of log sizes to the respondent from one particular contractor during the course of at least 1993 to July 1994. There is accord between the applicants and the respondent that there was an abnormally high pattern of Under 30cm diameter logs being delivered by Mr McConnon from the Payanna 149 and Gladstone coupes.

Between July 1993 to 22 July 1994 the vast majority of the loads of the logging contractor Mr McConnon, were consistently marked as Under 30cm despite this pattern being quite out of the ordinary, not only for the pattern of, or percentage of Under 30cm logs usually received by the respondent, but also having regard to the characteristics of the coupe at that time being felled by Mr McConnon and the immediate neighbouring coupe being felled by Mr Bowen.

The respondent’s evidence was that it came to Mr Hesketh’s attention that the contractor Mr McConnon was hauling in a greater percentage of Under 30cm logs than any other contractor, and that this was inconsistent with the area that he was logging. This anomaly was identified by a senior forester of the respondent during the course of routine analysis work. After being informed of the anomaly, Mr Hesketh caused all of the delivery dockets to be pulled from the files and an analysis of those dockets to be done. The outcome of that analysis was that some 75 per cent of Mr McConnon’s loads delivered during the period were identified on the delivery dockets as being Under 30cm logs.

The evidence of the respondent was that less than 6 per cent of its overall log deliveries in any one year were Under 30cm (Exhibit G27) and that as a result of this discrepancy it caused further enquiries to be made, including direct survey analysis of the coupe where the timber was felled.

Mr  Hesketh is the forest manager of the respondent and is a qualified forest assessor. He, in the company of other employees of the respondent, undertook a stump survey of the McConnon coupe (Payana 149) and at a coupe being worked by another of the respondent’s contractors, Mr Bowen, which was immediately adjacent to that of Mr McConnon. His evidence was that the forest growth and conditions were the same, and that the two coupes ought to have been consistent in their yield (T.504).  The stump survey undertaken (Exhibit G27) identified that the majority of the yield of timber from the respective coupes was Under 65cm, and that there was a small percentage only of timber which was likely to be Under 30cm.

I am satisfied that the percentage of Under 30cm timber recovered from the McConnon coupe would have been in the order of seven to ten per cent and, save and except if the timber had been mechanically split after being felled, not 76 per cent of the total as was marked on the delivery dockets by the cartage contractor and signed and approved by the weighbridge operators during the relevant period.

Mr Bowen, the adjacent contractor, also gave evidence as to the nature of the forest growth which had been worked at Payanna 149, and his observations of the type of timber being felled by McConnon. His evidence, which confirmed that of Mr Hesketh and the outcome of the stump survey, was also consistent with Mr Hesketh’s observations and experience in that coupe.  His evidence was that he did on one occasion observe Mr McConnon splitting timber, however it was not small logs, and that he mainly observed McConnon loads to be logs in the round and of Under 65cm and above and not split.

This latter matter is of some relevance, because the only explanation given by the applicants for the discrepancy in the yields between the coupes was that the contractor Mr McConnon may have been splitting his timber prior to delivery. The evidence was that it was the respondent’s policy that split timber was on no account to be counted as Under 30cm logs. There is some discrepancy in the evidence as to whether the applicants knew or ought to have known of this fact.  Having regard to the evidence of Mr Jago, a current weighbridge operator, as to his recent state of knowledge as to the treatment of split logs,  I am satisfied that it was not until 8 August 1994 that the respondent, by way of Mr Waining’s memorandum to the weighbridge operators (Exhibit G4), clearly spelt out this instruction.

Whilst none of the applicants gave evidence that they had observed the McConnon loads as being substantially comprised of split logs, I am satisfied that there were included as Under 30cm some loads of split timber. However even accounting for those loads of split timber, I am unable to accept that the number of McConnon loads marked as Under 30cm could have been constituted by split timber. This is in part because of the evidence of Mr Hesketh and Mr Daggar (and Exhibit G27) as to the proportion of split timber brought into the yard over a year being approximately 10-15     per cent of the total tonnage; of that split timber, less than 2 per cent being below 30cm; and the proportion of Under 30cm timber brought in over a year being six to eight per cent of the total tonnage of approximately 650,000 tonnes per year.

It is also because the evidence before me was that there was a dramatic change in the nature of the timber described on the weighbridge dockets after 22 July 1994, which change occurred prior to the applicants receiving the memorandum of  8 August 1994 discussed above. The evidence was that during the course of the respondent’s investigations into the discrepancies, one of its employee foresters, Mr Fitch, had inadvertently raised with Mr McConnon the unusual proportion of Under 30cm loads being invoiced on his behalf.  This conversation took place on 21 or 22 July 1994, and it is clear from the delivery dockets tendered in the proceedings that almost immediately the nature of the loads delivered by Mr McConnon changed from being mainly Under 30cm to mainly Under 65cm in description. There is no basis for this log profile changing so suddenly if, as has been suggested, Mr McConnon was splitting his logs. Mr McConnon was not called to give evidence in these proceedings. The court is therefore not informed as to any other explanation which may exist as to the change in pattern discussed above.

In view of the allegations made against Mr McConnon,  I do not conclude from his absence that his evidence would have necessarily been unhelpful to either the applicants or the respondent, however in the absence of any explanation from him as to the change in pattern, the court is entitled to rely upon a reasonable inference from the material before it. In this case, the inference I draw is that he became aware that the respondent was suspicious, and ceased to have the loads incorrectly described.

The evidence of Mr Hesketh, a forest manager and qualified forest assessor, was that on 12 July 1994, he observed a load of Under 65cm logs at the McConnon site, which were subsequently authorised by one of the applicants as an Under 30cm load. Mr Hesketh’s evidence was also that he had observed that Mr McConnon did not segregate his logs into various sizes, such that he would have been able to claim for smaller logs in the round in any event.

These factors, together with the profile attributable to all other contractors of the respondent, lead me to the clear and firm conclusion that the logs being received through the weighbridge from the McConnon coupes Payanna and Gladstone, were not Under 30cm as they were described, nor even timber split to Under 30cm in diameter, but in the main Under 65cm in diameter.

I am satisfied that the description of the McConnon loads on the delivery dockets misrepresented the nature of the logs being delivered through the weighbridge, and I am further satisfied that the logs being delivered were not principally split logs mistakenly characterised as Under 30cm, as suggested by the applicants.

I am satisfied of this matter having regard to the stump survey, the evidence of Mr Hesketh and Mr Bowen as to their observations, the evidenced profile and pattern of log sizes attributable to the forest type at Payana, and overall log profiles in the respondent’s business.

Having determined the nature of the loads which were being delivered by the McConnon contractor, it is necessary to consider the role or responsibility, if any, that the applicants had in relation to this misrepresentation. I turn now to consider the reasons for the termination of each of the applicants’ employment and their validity having regard to S170DE(1) of the Act.

S170DE(1) - Valid Reason
The respondent’s reason for the termination of the applicants’ employment  was that either they were involved in the misrepresentation, or that they turned a blind eye to it.  Whilst the respondent relies in part upon circumstantial and inferential evidence in support of its reasons for the termination of the employment, such evidence is extensive and compelling. The respondent submits that as a consequence of the applicants’ failure to perform their duties, a fraud was committed upon the respondent by one of its logging contractors.

It further submits that all of the applicants had by their conduct facilitated the fraud being committed on the respondent by that contractor. As part of the reasons for the termination of the employment the respondent says that they were parties, either actually, or alternatively by turning a blind eye to the contractor’s conduct. It is further implicit in the respondent’s reasons for the termination of the employment that the applicants failed to perform their duties at the most minimum standard required by the respondent.

I have earlier herein described the relevant duties and responsibilities of the weighbridge operators. The case of the applicants in response to the allegations made by the respondent substantially relied upon the proposition that the McConnon loads were principally constituted by split logs. I have earlier made findings of fact that this was not the case.

The applicants’ evidence was that they marked the loads as they saw them. Implicit in this explanation is that they had actually observed each, or the majority, of the loads brought in by the contractor. For a number of reasons I do not accept this evidence. Firstly, I have not accepted that McConnon loads were constituted by split logs of Under 30cm in diameter. Secondly, I am not satisfied that on their own evidence the applicants did take the requisite steps of observing the loads as they came over the weighbridge. Their own evidence that it was difficult to check all loads as they came in because of workload constraints, conflicts with their evidence “ that they marked the loads as they saw them”.  This latter explanation was the only explanation given by the applicants to the respondent at the termination interview on 12 October 1994, and is the only explanation as to the discrepancy given to the court.  

I have carefully considered the evidence of the applicants’ and the respondent’s witnesses as to the workload and time factors involved in log trucks being processed through the weighbridge.  The evidence was that no more than three laden trucks were allowed through the gate at any one time.  The evidence was also that in combination, the weighbridge operators duties were extensive and at some periods of the day the workload would be intense.  However there is no pattern to the time at which the majority of the Under 30cm loads were delivered which would provide an adequate accounting for any oversight on the part of the applicants due to intensity of work pressure. 

Notwithstanding the evidence of the applicants that they marked the loads as they saw them, I am not satisfied that this is so. To the contrary, I am not satisfied that they did see them. The conflict in the evidence of the applicants between marking the loads as they saw them and the difficulty in performing their load inspection duties because of their workload, has weighed heavily on me in my consideration of this matter. I am satisfied that the applicants simply did not perform their principal and fundamental duty as weighbridge attendants. In this regard I am satisfied that they failed to observe the loads coming across the weighbridge or to ascertain whether the dockets being completed by the log truck driver had been completed accurately.

The applicants relied in the proceedings upon the fact that the misrepresentation had apparently been occurring prior to them being employed upon the weighbridge as evidence of a lack of adequate training in the position of weighbridge operator. In this regard they said that the training they had been given was inadequate. This history was also partly relied upon in respect of the split logs issue which was discussed earlier in this decision.

Having regard to the immensity of the misrepresentation perpetrated upon the respondent by the contractor and driver, I am not satisfied that the applicants’ explanation that they did merely what they were trained to do is reasonable or sufficient. This is because, having regard to the duties of the weighbridge operators, it was their responsibility to ensure the loads were accurately recorded, and lack of training would not account for this failure. There was evidence in the proceedings that during the relevant period January to July 1994 a high proportion of Under 30cm loads off the McConnon coupe were approved by relief weighbridge operators (Exhibit Y15). Mr Daggar’s evidence  in cross-examination was that the respondent had investigated these loads and, having regard to the overall receipts from that contractor by those relief operators, was satisfied that there was nothing that warranted further investigation by the respondent of their conduct. His evidence was that there were factors associated with these loads and their overall context which distinguished them from those of the applicants which were under scrutiny. Those additional factors were not expanded upon in the proceedings. In my view this evidence may have been relevant had I been satisfied that there was a large proportion of split logs in the deliveries, however I am not, and it is the failure of the applicants to perform their duties with which I am concerned in these proceedings. The evidence in relation to the relief operators is less relevant when one is considering the question of the proper performance of their duties by persons employed in a permanent, full time capacity as weighbridge operators.

I am satisfied on balance that there was a failure on the part of the applicants to properly perform their duties as weighbridge operators, and that this failure amounted to a breach of the trust placed in them by the respondent.  This breach of trust amounted to serious misconduct, and in the circumstances provided valid reason for the respondent to terminate the employment of the applicants. For the reasons which follow, I am satisfied that the respondent was entitled to rely upon this failure in terminating the applicants’ employment. 

The respondent’s case was principally put on the basis that the applicants were parties to a fraud being perpetrated upon it. I am not satisfied on the evidence before me that the applicants were actual parties to any fraud in any criminal sense. Having regard to the heavy onus which must apply in circumstances where an allegation of criminal conduct is made, I am not satisfied that the evidence is of sufficient weight to entitle an inference of such a serious nature to be drawn. There is no evidence of benefit or gain to the applicants arising  from such a relationship. There is no evidence of any relationship between the applicants and the contractor Mr McConnon or his driver Mr Brown. These matters in these circumstances would be necessary to enable me to draw such an inference of criminal conduct in the applicants. In this regard I have considered Briginshaw v Briginshaw (1938) 60 CLR 336 and am of the view that such principles are appropriate to this aspect of these proceedings. There is on the evidence before me in these proceedings an alternative explanation to that of criminality which to accept does not in any way strain the bounds of credulity, and on this approach I am not satisfied that I ought draw the inference contended for by the respondent.

The applicants’ counsel submitted that, in the absence of finding that the applicants had been parties to a fraud in the criminal sense, the court must find that there was no valid reason for the termination of the employment. This was, he submitted, because the reason for the termination given by the respondent was that the applicants were involved in or were parties to the fraud. It follows on his submission that a finding that the applicants were merely negligent or failed to perform their duties does not establish that the reason relied upon by the respondent for the termination of the employment was a valid one.

I would agree with this submission if criminally fraudulent conduct was as far as the allegations against the applicants went and if it had not been established by the respondent that the substantive conduct which they alleged against the applicants was true. However, the conduct alleged against the applicants in this case is substantially the same whether one characterises it as fraudulent or as negligent. The conduct is the failure of the applicants to perform their duties by properly assessing loads and correctly marking weighbridge dockets. This breach of trust was one of the reasons for the termination of the applicants’ employment.

I am satisfied on the evidence of Mr Daggar, Mr Waining and Mr O’Dowd that the respondent was careful during the course of the interviews on 12 October 1994 to draw to the applicants’ attention the matters which it complained of and the concerns that it had in relation to their performance of their duties, and in particular the failure to properly mark the weighbridge dockets. What the respondent was doing in the course of the interviews was attempting to provide an atmosphere in which the applicants were able to give considered answers to the matters raised with them  (Exhibits G22 and G26).  Part of the applicants’ complaints in respect of procedural fairness is that the respondent did not clearly call upon the applicants to explain “their part in the fraud”. However I am of the view that despite this, and however one may define the conduct,  it was clear that the respondent was complaining of the applicants fundamentally failing to perform their duties in the manner which was expected of them, resulting in a significant loss of money to the respondent. The complaint was that logs were being marked and approved as Under 30cm from the McConnon operation when they simply could not have been of that size.  

This is not a case where the reason for the termination of the employment relied upon in the proceedings is different to that which was relied upon at time of the termination of the employment by the employer.  The reason in this case was that as a result of the conduct of the applicants, however one may describe it, the respondent had been defrauded by a contractor of approximately $60,000.   I am satisfied that the respondent had valid reason for the termination of each of the applicants’ employment.

I turn now to consider matters arising pursuant to S170DC of the Act and questions of procedural fairness, together with the other matters arising pursuant to S170DE(2) of the Act.

S170DC, S170DE(2)
On 12 October 1994 the respondent made arrangements to interview in turn each of the applicants in relation to the discrepancies in the McConnon weighbridge dockets. At that meeting the Secretary of the applicants’ union was present, together with a local job delegate. Opportunity was afforded to the applicants to leave the meeting and to have private discussions with the union if that was desired. The meetings were in part recorded to the extent consented to by the applicants (Exhibit Y3). In the case of Mr Cooper the tape recorder was inadvertently turned off at one point in time despite his desire that it be left on. 

In each of those meetings I am satisfied that the applicants were informed of the matters of concern to the respondent, and the conclusions which the respondent had drawn from the material it had available to it. The applicants were asked for an explanation as to the discrepancies, and in each case no explanation was able to be given. Issues such as training were raised by the Secretary of the union in relation to Mr Cooper’s interview, however no substantive matters were relied upon by the applicants.  The applicants were shown the delivery dockets relied upon by the respondent together with an analysis of those dockets broken down into months for each operator and individually (Exhibit G8, G9, G13, G14, G20.) They were also advised of the results of the stump survey and it was available for their perusal.

I have read the typed transcript of the tape recording and listened to the tape recording (Exhibits Y2 and Y3). Whilst I observe that there was a tendency in the interview process for the respondent’s managers and the union secretary to dominate the proceedings, I am satisfied that every opportunity was accorded the applicants to be heard in relation to the allegations as to their conduct and work performance, and that the union secretary was there to represent and did represent the applicants’ interests at the interviews.

Whilst there is evidence which would suggest that termination documentation had been prepared prior to the conclusion of the interviews with the applicants, this factor is not determinative of the question as to whether an opportunity has been fairly given to the applicants to be heard pursuant to S170DC or whether procedural fairness in any other respect had been accorded the applicants by the respondent. It may be a pointer to the fact that an employer is not open to listening to an explanation as to conduct or performance, but that is all. In this case having regard to the steps taken by the respondent, I am satisfied that a real opportunity was given to the applicants to provide an explanation for their conduct, and that they were in fact invited to do so on many occasions during the interviews.

I am not satisfied that such an explanation was forthcoming, nor that anything that was said in the course of the meetings was sufficient to raise doubt in the respondent as to the conclusions it had drawn as to the applicants’ conduct or work performance such as to warrant any further investigation or inquiry on its part. I am satisfied that the respondent accorded the applicants the opportunity to be heard required by S170DC and provided procedural fairness in the sense contemplated by the prohibition against harsh, unjust or unreasonable termination of employment in S170DE(2).

Harsh, unjust or unreasonable - the decision to terminate
I turn now to consider whether there is any aspect of the decision to terminate the employment of any of the applicants which in the circumstances could be described as harsh, unjust or unreasonable.

In relation to all of the applicants except Mr Cooper, the conduct complained of by the respondent was continuous. It was serious and in my view amounted to serious misconduct which justified the summary termination of their employment. I do not consider that the factors identified in relation to the individual applicants and their personal circumstances mitigate against this finding so as to establish the termination of the employment as harsh, unjust or unreasonable.

In the case of Mr Cooper there was a marked change in the pattern of loads authorised by him from Mr McConnon during June and July of 1994.  Prior to that time the loads checked by Mr Cooper were consistent with that which was to be expected from that coupe.  I have considered whether in these circumstances it is possible on the evidence to excuse or reduce the seriousness of the misconduct in view of the lesser period of time involved.

Having regard to the duties of the operators and the level of trust and responsibility vested in them, I am not satisfied on balance that the period of time in which the misconduct occurred is relevant to determining the issues in this matter.  The conduct continued for sufficient a period of time to warrant it being treated seriously by the respondent, and I am not of the view that the action taken by the respondent in terminating Mr Cooper’s employment is as a result of this aspect of the case harsh, unjust or unreasonable.

For the reasons given in this judgment the applications will be dismissed.

I certify that this and the preceding twenty one (21) pages
are a true copy of the reasons for judgment of
Judicial Registrar Parkinson.

Associate:
Dated:  19 June 1995

Solicitors for the applicants:  Jennings Elliot
Solicitor appearing for the applicants:  Mr R W Young

Solicitors for the respondent:  Shields Heritage
Counsel appearing for the respondent:  Mr N Green

Dates of hearing:  7, 8, 9, and 20 to 24   March 1995
Written submissions:  28 April 1995
Date of judgment:  19 June 1995