Drury v BHP Refractories Pty Ltd

[1995] IRCA 276

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - Complaint of UNLAWFUL TERMINATION - Application of Division 3 of Part V1A of Industrial Relations Act - Whether contract was SPECIFIED PERIOD CONTRACT or SPECIFIED TASK CONTRACT - Abusive and insubordinate conduct by employee - Warning given - Termination before repetition of conduct - Whether termination was HARSH, UNJUST OR UNREASONABLE - COMPENSATION.

RAYMOND DRURY v BHP REFRACTORIES PTY LTD

Industrial Relations Act 1988, ss170DC, 170DE, 170EE, 377

NO. NI.288 of 1994
CORAM:    WILCOX CJ
PLACE:    Sydney
DATE:     16 June 1995

IN THE INDUSTRIAL RELATIONS COURT)
OF AUSTRALIA  )        No. NI 288 of 1994
NEW SOUTH WALES DISTRICT REGISTRY)

BETWEEN:  RAYMOND DRURY

Applicant

AND:BHP REFRACTORIES PTY LTD

Respondent

MINUTES OF ORDER

CORAM:    WILCOX CJ
PLACE:    Sydney
DATE:     16 June 1995

THE COURT ORDERS THAT:

1. The application for review be dismissed.

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

IN THE INDUSTRIAL RELATIONS COURT)
OF AUSTRALIA  )        No. NI 288 of 1994
NEW SOUTH WALES DISTRICT REGISTRY)

BETWEEN:  RAYMOND DRURY

Applicant

AND:BHP REFRACTORIES PTY LTD

Respondent

CORAM:    WILCOX CJ
PLACE:    Sydney
DATE:     16 June 1995

REASONS FOR JUDGMENT

WILCOX CJ: This is an application for review under s.377 of the Industrial Relations Act 1988 of a decision by a Judicial Registrar of the Court in an unlawful termination of employment case. The original applicant was a registered organisation, Construction Forestry Mining and Energy Union of Australia ("CFMEU"), of which the employee, Raymond Drury, was apparently a member. However, after the decision of the Judicial Registrar and the filing of the application for review, Mr Drury decided to represent himself. He applied to be substituted as the sole applicant. With the concurrence of the CFMEU representative and without opposition from the respondent employer, I granted this application.

The facts

Ever since he left school, more than 25 years ago, Mr Drury has earned a living as a refractory bricklayer's labourer.  He explained to the Judicial Registrar that this is a specialised occupation, refractory bricks (used for boilers etc) requiring different handling techniques to ordinary bricks.  And, although Mr Drury used the description "labourer", it is apparent from his evidence that he was competent to operate, and did in fact operate, a variety of machines.

During most of the many years before the events the subject of this proceeding, Mr Drury worked with a man named Robert Seston.  Mr Seston has been employed on many construction sites and has frequently arranged for Mr Drury to take employment with him.  There was an issue before the Judicial Registrar as to the closeness of their friendship, but it was common ground that the two men travelled extensively together in the scope of their work, and often spent recreation time together.  They had an amiable relationship with mutual trust and respect.

In May 1990 Mr Seston commenced employment with Australian Industrial Refractories Installation Services ("AIR"), a division of BHP Refractories Pty Limited, the respondent employer.  Mr Drury worked under him in various projects he managed on behalf of that employer.  On each occasion, Mr Drury was employed by the company without any specification of the period of employment, but on the assumption that his employment would be terminated when the job was completed.  This in fact occurred.

In early March 1994 AIR obtained a contract relating to the construction of a new mini-mill at Rooty Hill near Sydney.  The site was owned by BHP Steel but AIR was employed as a sub-contractor by a non-BHP company referred to in evidence as "Danieli".  The job was due to start on 7 April.  Mr Seston was appointed as project manager.  On 16 March Mr Seston and Mr Drury were at the Tomago aluminium smelter to observe the trial of a pump.  Mr Seston told Mr Drury about the Rooty Hill job and asked him whether he was interested in working on it.  Mr Drury said he was.  Mr Drury asked Mr Seston the duration of the job.  According to Mr Seston, he replied: "Oh approximately 12 to 16 weeks".  He gave Mr Drury a job application form.  Mr Drury completed this form and returned it to Mr Seston.  The form opened "I hereby make application for employment as a labourer with AIR Installation Services at the Construction Site".  That site was identified in the heading as "the Sydney Mini Mill Project Construction Site".  The form did not specify, or provide for the applicant to specify, the duration of the employment.

Mr Drury was informed that his application was successful and asked to attend an induction day at the site on Friday 24 March.  This was the Friday before Good Friday.  It was arranged that Mr Drury would go home to Queensland for Easter but return to Sydney on the Tuesday after Easter, 5 April, and commence regular work at the site the following day.  He did this.  Along with others employed on the site, including Mr Seston, he was accommodated at a local motel.

Thursday was payday on this job.  On 7 April Mr Drury received his pay but he noticed that he had not been paid for the two Easter public holidays, Good Friday and Easter Monday.  He thought he was entitled to payment for these days under the relevant award, the National Building and Construction Industry Award 1990.  He raised the matter with Mr Seston, but without result.  He may also have said something about the omission from his payslip of an acknowledgment of his sickness benefit entitlements; it is not clear whether he raised this on 7 April or only on the next payday, 14 April.  Certainly, on 14 April, he complained to Mr Seston about both matters, the perceived omissions being still outstanding.  Mr Seston apparently told Mr Drury that he did not believe he was entitled to the two days' pay because he was paid as a casual for the induction and started regular work after Easter.  Mr Drury disagreed and, according to Mr Seston, told him he was being pig-headed.  Mr Seston suggested Mr Drury ring the pay office at Marsfield.  At some stage, he did; but he did not get the response he was seeking.

On the next payday (21 April) there was a further conversation between Mr Drury and Mr Seston, apparently more acrimonious than before.  Mr Drury again accused Mr Seston of being pig-headed.  Mr Seston said he had spoken to Peter Slattery of the Master Builders' Association.  He offered to ring Mr Slattery so that Mr Drury could speak to him.  Mr Drury accepted this offer and had a conversation with Mr Slattery.  According to Mr Seston, he terminated the conversation because "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".  Mr Drury said that he himself terminated the conversation.  Whatever the situation, Mr Drury was not persuaded by what Mr Slattery said to him.  He continued to press his claim for the two days' wages.

The relationship between Mr Drury and Mr Seston soured quickly after this day.  On the following Saturday, there was an altercation when Mr Seston rebuked Mr Drury for reading a newspaper at work.  He claims Mr Drury responded by complaining that he (Mr Seston) had not told him (Mr Drury) that he (Mr Seston) had rung the CFMEU.  Mr Seston denied having done so.  There was an exchange of accusations and denials.  At some stage, according to Mr Seston, another employee, Bill Veasey, became involved; apparently he was called by Mr Seston to assure Mr Drury that he (Mr Seston) had not rung the union.  How he could prove this negative, I do not know.  But, if Mr Seston's evidence is accurate, Mr Veasey heard Mr Seston tell Mr Drury, as Mr Seston claims, that he was being insubordinate and undermining his (Mr Seston's) authority, and causing disharmony; whereupon, according to Mr Seston, Mr Drury "raved more abuse and ... stormed off in his usual manner".

On the following Tuesday, 26 April, there was a further incident.  Apparently, Mr Drury spoke to Don Andrews, the Danieli project manager, about the two days' pay.  Later that day, as Mr Seston walked past him, Mr Drury asked Mr Seston whether Mr Andrews had spoken to him.  He had not.  So Mr Seston saw Mr Andrews who told him that Mr Drury had threatened "to get the union on the job".  Mr Seston gave Mr Andrews some documents concerning the matter.

On this same day, Mr Seston contacted John Raymond, the AIR General Manager, and complained of Mr Drury's conduct.  Mr Raymond spoke to Mr Slattery and faxed a memo to Mr Seston telling him that Mr Drury's behaviour constituted insubordination.  He wrote that the conduct was "other than serious misconduct" (original emphasis) and therefore would be covered in section 5 of the BHP Termination of Employment booklet.  He went on:

"The course of action should be - when he carries on again, issue him with a verbal warning along the lines I've written on the attachment.

If he again, is insubordinate he should be issued with a written warning (see attached) as a second warning stating clearly that if it happens again he will be dismissed - need witness.

If it happens again, he is terminated with a weeks pay in lieu and in writing."

The next incident occurred two days later, 28 April.  This was a payday.  According to Mr Seston, in the presence of Mr Veasey, Mr Drury opened his pay and told Mr Seston "that he hadn't been paid for the public holiday again and that he was entitled to it the union had told him and I was being fucking pig-headed about it".  A reference was made to Mr Andrews.  Mr Seston told Mr Drury that he had "had enough of this abuse and the way he was carrying on and being so insubordinate" and "I'll have to give you a warning".  As Mr Drury walked away he told Mr Seston "to go and get fucked".  Later that day, according to Mr Seston, as the two men reached the motel, Mr Drury again told him, in front of others, that he "was being fucking pig-headed".

The next day, Friday 29 April, was Mr Drury's last day on the job.  According to Mr Seston, it commenced with Mr Drury coming into the site office at 6.50 am, complaining about the two days' pay and talking about calling in the union.  As he departed, again according to Mr Seston, Mr Drury said "no wonder your fucking wife left you".  Mr Drury was aware that Mr Seston was separated from his wife.  Sometime later Mr Veasey came to Mr Seston with a report that Mr Drury was reading his newspaper.  Mr Seston completed a warning notice form.  He had Mr Veasey witness his signature and Mr Seston took the form to Mr Drury who "got up and sort of stormed off".  The warning notice was a printed document on the AIR letterhead.  As printed it read:

"This is to advise that this is your:      first/second/etc/final warning (please circle one)."  Mr Seston circled "second".  He completed the printed line "This warning is given to" by writing "your Out Burst (sic) and Abuse to My Self and undermining My Authority Causing Disharmony On the Project".  Against the line "Repetition of this action or failure to improve may result in", he wrote "Dismissal".  After the words "Improvement required", he wrote "To Stop the Abuse and Disharmony on the Project".

At some stage after service of this notice, Mr Drury left the site.  After he returned to work Mr Veasey told Mr Seston that Mr Drury was telling the other men that he had been to the AIR office at Marayong and seen John Fox (contract manager for the Sydney office) who told him he would be paid for the holidays.  Mr Seston telephoned Mr Fox, who said that he had only promised Mr Drury that he would look into the matter.  In his evidence, Mr Seston detailed what happened thereafter:

"Now after you had had this conversation with Mr Fox what then happened?---I went on over to the site and I called Ray Drury out of the furnace and I said, I hear you're telling everyone that you're going to get paid for the public holiday, he said that's correct, John Fox has told me that I am going to be paid for it.  So, I said well, you had better come over the office I said and we'll ring John Fox and we'll find out if it's true.  So I took Ray Drury over to the office, I got on the phone and dialled John Fox, John Fox got on the phone, I said I've got Ray Drury here, I said would you mind speaking to him.  And as far as I know, John Fox told him that he didn't say that he was going to get paid and then Ray Drury started carrying on and he said, oh there was so and so there.  So, so and so got on the phone and then he didn't agree with him.  Then someone else got on the phone and he didn't agree with what he said and I think it finished up he went through about three of them, the guys in the yard.  So I said to him, I said well that's enough, I took the phone off him and put the phone down.  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".

It is important to note that this narrative does not include any allegation of personal abuse.  Mr Seston did not claim he was abused by Mr Drury after he served the warning notice.  In evidence before me Mr Drury said that he did not abuse Mr Seston after he received the warning notice, that he knew it would be stupid to do that because it would lead to his dismissal and it was not worth losing his job for two days' pay.

Following his dismissal Mr Drury consulted his union.  On 24 May CFMEU filed an application pursuant to Division 3 of Part V1A of the Industrial Relations Act seeking reinstatement and compensation.

The application of the Act

The respondent submitted to the Judicial Registrar that CFMEU was not entitled to rely on Division 3 of Part V1A.  Section 170CC of the Act provides that the "regulations may exclude specified employees from the operation of specified provisions of this Division", subject to some presently immaterial qualifications.  As it read at the time of the filing of the application in this Court, regulation 30B(1), made pursuant to that provision, relevantly provided:

"30B(1)   Subject to subregulation (2), 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 V1A of the Act:

(a)an employee engaged under a contract of employment for a specified period of time;

(b)an employee engaged under a contract of employment for a specified task;

(c)  ...
     (d)  ..."

Subregulation (2) is not presently relevant.

At the hearing before the Judicial Registrar, counsel for the respondent put arguments based on both para (a) and para (b).  The Judicial Registrar rejected both arguments and held that the regulations did not exclude the claim.  Counsel repeated his arguments before me.  Like the Judicial Registrar, I think they are erroneous.

Paragraph (a) has been considered on at least two occasions by members of this Court.  See Cooper v Darwin Rugby League Inc (1994) 57 IR 278 (Northrop J) and Anderson v Umbakumba Community Council (von Doussa J, 26 September 1994, not reported).  Counsel submitted to me that these decisions were wrong.  But I do not propose to enter into that question, for two reasons.  First, on 16 November 1994, after those decisions and possibly as a consequence of them, para (a) was amended.  It is possible that the amendment affected the continuing validity of their Honours' views, assuming they were correct when given.  I do not say that the amendment does make a difference; I prefer to leave that question until it arises.  It does not arise in this case, and that is my second reason.  It is plain that Mr Drury was not "engaged under a contract of employment for a specified period of time".  He was engaged under an open-ended contract of employment, both parties presumably assuming (without saying) that the contract would last for the duration of the job.  It is true that Mr Seston gave Mr Drury an estimate of the length of the job, 12 to 16 weeks.  But this was no more than an estimate.  If the job had taken longer, both parties no doubt assumed that the contract would continue until it finished.  The fact that Mr Seston quoted an imprecise figure demonstrates that he was not intending to engage Mr Drury for a specified period of time.

Paragraph (b) presents the respondent with a more arguable proposition.  Both Mr Seston and Mr Drury assumed, without saying, that the contract of employment would run for the duration of the Rooty Hill job and then terminate.  This had been the position in relation to the other jobs on which Mr Drury had worked with Mr Seston.  Counsel argues that the Rooty Hill job was a "specified task" for the purposes of para (b).  He is driven by the logic of that argument to say that para (b) applies whenever an employer employs a person to work on a particular project, whatever its size and duration.  I do not think this is correct.  The words "for a specified task" qualify the words "contract of employment".  The contract of employment must be for a specified task; it must be a contract under which the employee is to carry out a specified task.  The words "for a specified task"  have nothing to do with the employer's task, or project.  This seems clear as a matter of grammar and it makes sense in policy terms.  One can understand a view that the protections provided by Division 3 of Part V1A should not be available to people who undertake only a specified task.  Especially after the task is completed, it would be anomalous to restrict the employer's right to terminate the contract of employment.  Bearing in mind that many projects undertaken by employers continue for many years, while employees come and go, it would be equally anomalous to exclude relief under Part V1A simply because the employee was engaged in connection with a particular project.

The merits of the termination

The Judicial Registrar found that CFMEU had established breaches of both s.170DC and s.170DE of the Act. Section 170DC deals with procedural fairness. It provides:

"170DC    An employer must not terminate an employee's employment for reasons related to the employee's conduct or performance unless:

(a)the employee has been given the opportunity to defend himself or herself against the allegations made; or

(b)the employer could not reasonably be expected to give the employee that opportunity".

Section 170DE is concerned with substantive fairness:

"170DE(1) An employer must not terminate an employee's employment unless there is a valid reason, or valid reasons, connected with the employee's capacity or conduct or based on the operational requirements of the undertaking, establishment or service.

(2)A reason is not valid if, having regard to the employee's capacity and conduct and those operational requirements, the termination is harsh, unjust or unreasonable.  This subsection does not limit the cases where a reason may be taken not to be valid".

The Judicial Registrar said there was some confusion as to the reasons for Mr Drury's termination.  But he commented that "it was clear that what caused this sorry affair was his dogged pursuit of the two days pay for the Easter break".  I agree with this comment, including the description "sorry affair".  The course of events immediately preceding Mr Drury's termination reflects no credit on anyone.  Whatever the merit of his original complaint, and I have no view on this as that matter was rightly seen as irrelevant and not argued, Mr Drury prosecuted his complaint in an inappropriate way.  It was reasonable for him to raise the matter with Mr Seston and pursue it with the pay office and even with Mr Fox.  But it was pointless for him to continue to complain about the matter to Mr Seston and inappropriate for him to do so in an offensive and abusive way.  If he wished to pursue the matter, the appropriate course was for him to do so in a rational way, referring to the award provisions that he thought supported his case.  If he distrusted his ability to do this adequately, he should have enlisted the assistance of his union or some other person in whom he had confidence.

However, the respondent also handled the matter badly.  Mr Raymond knew about the problem.  He knew that, rightly or wrongly, Mr Drury had a strong sense of grievance.  Yet he took no action to resolve his complaint.  He merely advised Mr Seston that Mr Drury's action constituted insubordination justifying dismissal, if repeated after a warning.  Mr Seston had worked with Mr Drury on numerous projects over many years.  He must have had a high opinion of him as a worker, because he routinely sought him out for work.  He knew that Mr Drury believed he was being cheated out of his rights, and felt strongly about the matter.  Yet he took no steps to resolve it; to obtain, and give to Mr Drury, a reasoned explanation of the situation, or to persuade him to obtain his own advice on the matter.  He merely "pulled rank", asserting that Mr Drury was being insubordinate.  Although the assertion was accurate, it was unlikely to soothe a feisty individual like Mr Drury, especially when he was under the belief that he was being betrayed by a friend.

Having said all this, the fact remains that Mr Drury's behaviour was unacceptable. I agree with Mr Raymond that it did not constitute "serious misconduct", warranting instant dismissal. But it was behaviour that went beyond even the "give and take" atmosphere of a modern Australian workplace. It was disruptive behaviour that called into question the authority of the person who was in charge of the project. If continued after a clear warning, it was conduct that constituted a valid reason, connected with the operational requirements of the project, for Mr Drury's termination: see s.170DE(1) of the Act. And, if the conduct continued after the written warning of the morning of 29 April, the termination would not have been harsh, unjust or unreasonable; see s.170DE(2).

However, Mr Drury did not continue his abuse of Mr Seston between the giving of that warning and his termination. Perhaps he would have done so, sooner or later, if not dismissed. But the fact is that, even on Mr Seston's account of the matter, Mr Drury made no derogatory, abusive or intimidatory statements to Mr Seston between the time he was given the written warning and the time that Mr Seston terminated him. Mr Drury did continue to press his claim for the two days' pay, both with Mr Fox and in his subsequent conversation with Mr Seston. But he was entitled to do this. The warning notice did not enjoin him from that course; nor could it reasonably have done so. The unacceptable aspect of Mr Drury's behaviour was not the pressing of his claim for the two days pay, whether or not the claim was well-founded, but his doing so in an abusive and insubordinate manner. Mr Seston seems to have overlooked this distinction in deciding to terminate Mr Drury on the afternoon of 29 April. He seems to have regarded his action in pressing his claim as conduct that defied the morning's warning. It was not. To dismiss Mr Drury at that time, when he had not acted in defiance of the warning was to breach s.170DE(2) of the Act; the termination was, in the circumstances, harsh, unjust or unreasonable. I agree with the Judicial Registrar that the termination was invalid for substantive unfairness. It is not necessary for me to determine whether or not it was also procedurally unfair.

The amount of compensation

By the time the matter came before the Judicial Registrar, the Rooty Hill job was complete. Under the circumstances, it was common ground that reinstatement was impracticable. The Judicial Registrar awarded Mr Drury compensation under s.170EE(3) of the Act in the sum of $10,772; this being the amount of the wages that Mr Drury would have earned at Rooty Hill if he had been allowed to continue on that project until its termination. In this review, counsel for BHP Refractories does not challenge the amount of compensation awarded by the Judicial Registrar. He accepts that, if Mr Drury is entitled to succeed, contrary to his argument, the awarded compensation is appropriate. But Mr Drury contends that the Court should allow more. At a directions hearing before the hearing of the review, Mr Drury said that he wished to be compensated for wages lost on other projects that arose after his termination at Rooty Hill. There was no evidence about these projects. I directed Mr Drury to send a document to the respondent's solicitors listing the projects to which he was referring and I informed him that he could issue a subpoena to obtain documents concerning them, if necessary, so there would be evidence as to their nature, their date and duration and the wages being paid on them to comparable employees. It appeared that the employer on most (if not all) the projects referred to by Mr Drury was BHP Refractories, so there seemed a good chance that the parties could agree on the facts surrounding them.

Mr Drury did send the solicitors a list of the projects. Unfortunately, he did not issue a subpoena or take other action to ensure that there would be evidence about the projects. When the omission came to light at the hearing, Mr Drury sought an adjournment to allow him to provide the evidence. At the same time he complained about the number of times he had been forced to come to Sydney, from Queensland where he lives, in connection with this case. Particularly because of this complaint, I instigated an "in principle" discussion about those projects, so that I could determine whether they were so likely to be significant as to warrant the expense and inconvenience of an adjournment. Mr Drury thereupon mentioned six projects, all involving BHP Refractories. But three of them commenced at a date well after the expiration of six months from the Rooty Hill termination; so they would have to be ignored for the purposes of a s.170EE(3) computation. Another two projects were stated to have commenced about October-November 1994, right on the six months limit and, anyway, overlapping. The remaining project was one at Mt Isa in about July 1994. This project would clearly have been relevant if I reached the conclusion that, but for his termination at Rooty Hill, Mr Drury would have been offered employment on that project. Counsel for the respondent submitted that I should not so conclude. He said that, whether or not it was reasonable for Mr Seston to terminate Mr Drury's employment at Rooty Hill, the evidence showed that the relationship between Mr Drury and Mr Seston had seriously deteriorated; so that, even if he had not been dismissed at Rooty Hill, Mr Seston would not have been likely to offer him employment on future projects. He said that this reluctance would probably extend to other BHP Refractory executives, the contretemps between Mr Seston and Mr Drury being well-known.

In response to this, Mr Drury informed me from the bar table that, at the present time, he is working on a BHP project.  I am not sure whether his employer is BHP Refractories or someone else.  I accept this, and I think it indicates that, in time, most things are forgiven.  Mr Drury is obviously a good worker and respected for his competence.  But I think it unlikely that the Rooty Hill unpleasantness would have been forgiven or forgotten as early as June 1994, so as to provide for him a position on the Mt Isa project.  Having regard to the whole situation, I reached the conclusion that I could not be satisfied on the probabilities that, absent the termination but having regard to everything that preceded it, Mr Drury would have been offered work on the Mt Isa project.  Accordingly, I declined the application for adjournment.

Orders

I am of the opinion that the Judicial Registrar correctly held that the termination of Mr Drury's employment by BHP Refractories infringed the Act.  And I uphold his order for compensation.  It follows that the appropriate order is that the application for review be dismissed.  I so order.

I certify that this and the preceding eighteen (18) pages are a true copy of the Reasons for Judgment of his
Honour Chief Justice Wilcox.

Associate:

Dated:

The applicant appeared in person

Counsel for the Respondent:         P C Coleman

Solicitor for the Respondent:       Blake Dawson Waldron

Date of Hearing:  31 May 1995