Gellie v Commonwealth Bank of Australia
[1996] IRCA 298
•05 July 1996
DECISION NO: 298/96
C A T C H W O R D S
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - SERIOUS MISCONDUCT - OPERATIONAL REQUIREMENTS - CONDUCT AND PERFORMANCE -VALID REASON - HARSH UNJUST or UNREASONABLE - bank officer signing withdrawal forms in name of other account holder - verbal authority given - no dishonesty vis a vis other account holder - failure to comply with procedures - initial denial when questioned - whether misconduct justified dismissal - relevance of previously published expectations to characterisation of conduct.
Industrial Relations Act 1988 ss.170 DB, 170DC, 170DE, 170EDA
CASES:
Suares v Commonwealth Bank of Australia (Murphy JR, 10 May 1996, unreported);
Cohen v Orient Trading Pty Ltd (Murphy JR, 31 May 1996, unreported);
Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66;
Selvachandra v Peteron Plastics Pty Ltd (1995) 62 IR 371;
Kenefick v Australian Submarine Corporation (1995) 62 IR 107;
Sangwin v Imogen Pty Ltd (trading as Carleton Custom Upholstery) (von Doussa J, 8 March 1996, unreported);
Mason v Electricity Commission of NSW (1995) 62 IR 436;
Byrne v Australian Airlines Ltd (1995) 131 ALR 422;
Puccio v Catholic Education Office and Anor. (von Doussa J, 17 May 1996, unreported);
Fryar v System Services Pty Ltd (von Doussa J, 10 May 1996, unreported);
Wyndham Lodge Nursing Home Inc. v Reader (Wilcox CJ, Ryan and North JJ, 15 April 1996, unreported);
Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20;
Boland v Maningrida Council Inc. (24 April 1996, Wilcox CJ, unreported);
Gregory v Philip Morris Ltd (1988) 80 ALR 455;
Jones v Department of Energy and Minerals (1995) 60 IR 304;
Aitken v Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia - Western Australian Branch (1995) 63 IR 1;
Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285.
WINIFRED ANN GELLIE -v-
COMMONWEALTH BANK OF AUSTRALIA
No. VI 5621 of 1995
Before: Judicial Registrar Murphy
Place: Melbourne (heard at Ballarat)
Date: 5 July 1996
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 5621 of 1995
B E T W E E N :
WINIFRED ANN GELLIE
Applicant
AND
COMMONWEALTH BANK OF AUSTRALIA
Respondent
MINUTES OF ORDERS
Judicial Registrar Murphy 5 July 1996
THE COURT ORDERS:
That the application is dismissed.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 5621 of 1995
B E T W E E N :
WINIFRED ANN GELLIE
Applicant
AND
COMMONWEALTH BANK OF AUSTRALIA
Respondent
Before: Judicial Registrar Murphy
Place: Melbourne (heard at Ballarat)
Date: 5 July 1996
REASONS FOR JUDGMENT
The respondent is a major financial institution and until 25 October 1995 employed the applicant as a teller at its Wendouree Village branch. She was dismissed for misconduct on that day and brought these proceedings under s170EA of the Industrial Relations Act (“the Act”) seeking reinstatement to her position.
The reason for her dismissal related to her failure to follow proper procedures for a number of withdrawals made from an account in the name of Melissa Peart and her response in an interview when questioned about the matter. At issue in the proceedings was the validity of the respondent’s reason for her termination, whether procedural fairness had been accorded, and whether the employment relationship could be re-established.
The applicant’s over-involvement with money, horses and ostriches
For some years the applicant has had a limited involvement in the horse racing industry and at the relevant time held a trainer’s license. About 20 years ago she had some minor dealings with a Ms Gail Burke (“Burke”). Burke purchased a couple of horses for the applicant, and they went to some race meetings together. Burke’s marriage broke up and the two of them lost contact until February 1994. At that time they met at a country race meeting and that contact led to these proceedings.
After that meeting Burke telephoned the applicant on a number of occasions essentially boasting about the money she was making selling ostriches on commission. The telephone contact continued until September 1994 when Burke telephoned the applicant at the respondent’s Wendouree Village branch and sought her assistance in a financial transaction. Burke advised the applicant that she was stranded and needed the use of the applicant’s bank account to accept the deposit of some money from Swan Hill. The money was her commission earnings from a Mr Geoff Smith from the sale of ostriches and was then to be dispersed from the applicant’s account to a number of payees who were to attend at other branches of the respondent. The applicant agreed. She ascertained that the money was paid by a bank cheque from another bank in Swan Hill and was thus available to be dispersed immediately upon its receipt into her account.
Despite the applicant’s protestations, subsequent to this additional moneys were deposited into the applicant’s salary account and dispersed by the applicant on behalf of Burke. The purposes included payment for the purchase of horses and cars, other payments to individuals, and even to telephone betting accounts. The money was dispersed in cash, by bank cheque and money orders. At this time the applicant’s involvement with Burke also increased. She “represented” Burke at various race meetings and visited her home in Cranbourne. On one occasion Burke was bragging as to the amount of money she was earning and made a veiled threat as to the power such earnings gave her. It was in this context that the applicant continued to allow her bank account to be used as a conduit for Burke. She continued also to run messages for Burke by procuring bank cheques and money orders for a number of individuals and organisations. Overall, over the period September 1994 to January 1995, some $186,000 of Burke’s passed through the applicant’s bank account.
In November 1994 Burke asked the applicant to attend a horse sale to purchase a horse on her behalf. The applicant did not have a cheque account. Her boarder, a young woman Melissa Peart, had an inactive cheque account. The applicant asked Ms Peart whether she could deposit some funds into the account and then use a cheque written by Ms Peart to pay for any horse purchase. $6,250 of Burke’s money was transferred from the applicant’s account to Ms Peart’s cheque account. Ms Peart signed a couple of cheque forms. The applicant attended at Cranbourne around that time. The horse however was not purchased and the applicant advised Burke that she would disperse the funds at Burke’s direction. At that stage the applicant obtained from Ms Peart a “heap” of signed blank withdrawal forms. Over the period 8 November to 20 December 1994 the applicant made nine withdrawals from the account totalling some $4,320. She did not utilise the withdrawal forms signed by Ms Peart but merely wrote out a withdrawal form and signed it with Ms Peart’s name.
In February 1995 the media took an interest in Burke and a journalist from the television program “A Current Affair” left a card at the applicant’s home and tried to contact her at the branch. Further, about a week before a person who claimed he was owed money by Burke had contacted the applicant as he had been advised that moneys had been paid into the applicant’s account.
The applicant, concerned at this turn of events, for her own position in the bank, and the possibility that the respondent would be the subject of adverse publicity, then went to see the Ballarat Central Branch Manager of the respondent. She gave him some details of her involvement with Burke. From the memorandum recording the discussion it appears that the applicant did not refer to the use of Ms Peart’s account at that stage.
The matter was referred to the respondent’s head office and to its investigation department. At some stage the Victoria Police Major Fraud Squad began an investigation of Burke. The respondent decided not to jeopardise this investigation and deferred questioning the applicant until it had received the all-clear from the police.
The respondent interviews the applicant
The applicant remained employed in her position over this time and was eventually interviewed by the investigation department of the respondent on 21 July 1995. At that stage the principal investigator, Mr Forkgen, had obtained from the police investigator copies of the bank deposit and withdrawal forms associated with the use of both the applicant’s and Ms Peart’s accounts.
The interview was taped and subsequently transcribed. The applicant was cautioned and advised by Mr Forkgen that the purpose of the interview was: “What we want to talk to you about is basically your relationship with a few people. One in particular being Gail Burke. What can you tell us about your dealings about (sic) Gail Burke?” The applicant proceeds to explain the background to her dealings with Burke. Mr Forkgen then proceeds to seek her explanation for the various transactions where moneys were channelled through her account and Ms Peart’s account. Late in the interview the applicant is asked about the withdrawal forms from Ms Peart’s account. She explains that money was transferred because Ms Peart had a cheque facility. The investigator explains that $6,250 went into the account and then it was withdrawn out. The applicant explains where the money went to and then the applicant is asked about Ms Peart as follows :
Respondent: “What’s Melissa do?
Applicant:“She works at ‘Speedy Dry Cleaners’ in Lydiard Street.”
Respondent: “Right, she signing all these withdrawals?”
Applicant: “Yeah, she signed them.”
Respondent: “Cause they’re all in your handwriting.”
Applicant: “Yep, yep.”
Respondent: “She signed them all?”Applicant:“Yeah, she signed a heap of them for me and then I just, I just withdraw it. I just had them there and I just withdraw them when Gail wanted the money.”
(There are then a number of questions about individual entries in the account, and then the applicant is shown a series of withdrawal forms). The interview continues :
Respondent: “Right, who’s signature’s that?”
Applicant: “That’s Melissa’s.
Respondent: “That’s Melissa’s?”
Applicant: “Yep.”
Respondent: “Who’s signature’s that?”
Applicant: “That’s hers as well.”
Respondent: “So, she’s got two different signatures.”
Applicant: “Yeah, she signed that when she, hurt her hand.”
Respondent: “Are you sure?”Applicant:“Yep, yep. She signed about twenty for me when she hurt her hand. She plays netball and her hand was strapped up and I said sign as best way you can and I’ll put it through. That’s her signature, that’s her normal signature.”
Respondent: “That’s her normal signature?”
Applicant: “Yeah, that’s her normal signature now.”Respondent: “That’s her normal signature appearing on a document appearing on the 16th of the 11th ‘94?”
Applicant: “Yep.”
Respondent: “And that’s her signature on the 11th?”
Applicant: “Yep, that’s right.”
Respondent: “Or on the 14th, two days before?”Applicant:“Well, when she signed the, all the forms for me I was.”
Respondent: “All I’m getting at, is that it’s quite, it’s quite peculiar, I mean there’s not going to be a great concern if you say that you signed those.”
Applicant: “There’s not?”
Respondent: “No.”Applicant:“Well, that’s fair enough, ‘cause that’s one of the other things that I was worried about.”
Respondent: “These are your signatures?”
Applicant: “Yeah they are.”
Respondent: “They’re not hers?”
Applicant: “No they’re not.”
Respondent: “I don’t want to get stuck on that.”
Applicant: “Yeah, right.”
Respondent: “Because I mean...”
Applicant: “No, well I...”
Respondent: “... it’s stands out like the proverbial.”Applicant:“Yeah I know it does. And I knew it probably would when the, when you were looking at it. I just didn’t want her to get into any more trouble, or any trouble about it at all.”
Respondent: “She wouldn’t because, I mean if, I mean I’m not suggesting that the relationship between you and Melissa will ever sour, but if it does...”
Applicant: “No, well I...”
Respondent: “... she comes in and says, she comes into us and says there’s $6,500 there, there’s all these withdrawals that I haven’t signed, it’s all my money, what’s going on.”
Applicant: “Yeah, right.”
Respondent: “Then we’re up that proverbial creek again.”
Applicant: “Yeah.”
Respondent: “And that proverbial paddle, so.”Applicant: “Yeah, I know.”
Respondent: “So, you have sort of put the Bank in a bit of a position there.”
Applicant: “Yep, right.”
Respondent: “I mean, regardless of what else has gone on but I mean suffice to say, we may or may not need to get Melissa just to say, well look all those transactions there, they’re all fine by me.”
Applicant: “Yeah, yeah”.
Respondent: “We’ll get her to sign something to that effect, which we’ll look at later.”
Applicant: “Yeah, right.”
At the end of the interview Mr Forkgen says :
“As far as the Bank goes, there’s no real reason for our concern, all bar at this stage, the withdrawals on Melissa’s account. Which as I said we may have to get confirmatory withdrawals off her and I’m not in a position to say what the Bank will say about it, but I mean, it was that obvious it had to be said, so!”
The applicant responds :
“Well, I didn’t want to put her into it, that was all. I didn’t want to involve her.”
The applicant was then asked whether she had anything further to say and she then proceeded to explain how she was somewhat of a risk-taker in life, was caught on rollercoaster in these transactions, and was worried about the impact of what had happened on her position at the bank and on the bank itself.
After the interview Mr Forkgen prepared a list of withdrawals (Exhibit R4) from Ms Peart’s account and sought her acknowledgment that the “withdrawals were debited to (her) account with (her) knowledge and approval”. Ms Peart signed that document in early August.
The respondent continued to ruminate on the applicant’s response in the interview. On 14 September the applicant was offered the opportunity to resign. She declined. This occurred although at that time the respondent believed it had sufficient material to dismiss the applicant. It was, however, prepared to give her the opportunity to resign in view of “the circumstances surrounding the events and the protracted manner.... of the investigation”.
The applicant was then invited to give reasons why she should not be dismissed. The purpose of this opportunity was to allow the applicant to put any more material before the respondent. The applicant then wrote a letter admitting what she had done was in breach of bank policy. She referred to her service with the respondent and its predecessor, the State Bank of Victoria, and to the impact that the whole Burke saga had on her. Around the same time Ms Peart confirmed in writing to the respondent, after she had been interviewed by the respondent’s investigators, that what the applicant had done in relation to her account had been done with her authority.
The respondent continued to deliberate on the applicant’s fate before dismissing her without notice on 25 October 1995. The dismissal letter (Exhibit R1), signed by Mr F J Rosbrook, Chief Manager, Personnel, Victoria, read in part :
“The Commonwealth Bank of Australia has concluded its enquiry into allegations that you made nine withdrawals totalling $4,320 from account 3519 1004 2490 in the name of Melissa Peart between 8 November 1994 and 20 December 1994, without proper authority. Furthermore, you deliberately attempted to conceal the transactions by signing the withdrawals as M Peart and initially advised officers of Network Services that the withdrawals were signed by Ms Peart with a broken hand.
Your responses during the interview on 21 July 1995 and 14 September 1995 and your representations have been taken into account.”
The reasoning behind the dismissal - proper authority
Mr Rosbrook, who, as well as the Victorian Manager of the respondent, has authority to dismiss employees, said that there were two bases for the respondent’s decision in relation to the applicant. The first was the applicant’s failure to comply with the respondent’s procedures for the operation of accounts in the name of a third party. The respondent has a particular form “A17” (Exhibit R13) which must be completed where one party is to operate an account in the name of another party. This form was not completed and the respondent did not “operate on verbal authorities in that respect”. Another aspect was that in no circumstances would the respondent countenance what happened here where one person purported to sign withdrawals on behalf of another person in that person’s name.
Mr Rosbrook gave evidence of three or four cases where “we’d actually dismissed staff for operating with authority on the accounts of family or other staff members”. He said that he thought that “dishonesty was prevalent in each of them”. They were cases where verification of the transactions had been obtained later and there was no personal gain to the individual staff member. He saw the circumstances of this case as the same.
The Statement of Professional Practice and dishonesty.
The second reason for the dismissal was that the respondent found the applicant to be dishonest. Mr Rosbrook’s evidence was that the banking industry is one where honesty is its cornerstone. This is endorsed in the Statement of Professional Practice (Exhibit R6) that is distributed to all staff and sets out the high standards expected of staff. The statement commences with the following:
“Banking is a profession founded on very high standards of personal integrity and conduct which requires absolute honesty.”
It refers to the need for staff to be “absolutely honest in all your professional activities. Stealing, borrowing, misappropriating money or property to private use, unauthorised access to information and fraudulent acts generally, are criminal offences.”
Mr Rosbrook’s evidence was that the respondent considered the applicant’s previous good record of service but formed the view that the combination of the withdrawals on Ms Peart’s account and the applicant’s initial denial of her signing of the withdrawals from Ms Peart’s account were such that the whole issue of honesty was brought into question. Mr Rosbrook queried why there had been a delay in the applicant bringing the matter to the respondent’s attention. He said that the bank should have been told immediately about the Burke and Peart transactions.
Perhaps the reasoning of the respondent is best encapsulated in this reply by Mr Rosbrook:
Counsel :
“And did the Peart matter loom large in terms of your decision to dismiss?”
Witness :
“Well, I think in arriving at the decision we gave - we were prepared to give her the benefit of the doubt on her involvement with the Burke case. In terms of her honesty, in the interview where she had denied emphatically that those withdrawals had been signed, particularly when there were supposedly 20 signed withdrawals in her custody at the time, and then, you, ultimately we had to then, I suppose, bring her honesty and integrity into question, and ultimately that decision to dismiss was made after consideration of certainly the Burke involvement, and as I say, give her the benefit of the doubt on that. But in terms of her honesty in the interview and particularly in relation to the Peart withdrawals, I don’t think we were left with any alternative. We either condone it or we don’t condone it.”
Mr Rosbrook said that as far as the respondent was concerned the matter was black or white. If dishonesty was detected, dismissal followed. He said that the applicant “would not be the first one that has been dismissed for the first time for being dishonest.” In cross-examination Mr Rosbrook conceded that the “lie” was momentary. Mr Forkgen said that the applicant appeared red-faced when pressed in relation to the withdrawal slips and had been fully co-operative in the record of interview.
The respondent referred to circulars and letters that had been distributed to its staff referring to the issue of the standards of honesty expected. One dated 24 October 1994 (Exhibit R8) states that “the Bank will not countenance dishonesty”. Another dated 6 July 1994 (Exhibit R7) states : “In an industry such as ours, we have no option but to dismiss all who have been dishonest. Deception will not be countenanced. There are NO DEGREES OF HONESTY” (emphasis in original).
In a circular (Exhibit A1) issued on 28 November 1995, after the applicant was dismissed, the respondent referred to a number of instances of misconduct that had resulted in dismissals. The letter said that “(s)taff who are found to have misappropriated funds, or transacted on customer accounts without proper authority will be dismissed.” Mr Rosbrook said that the letter was “just one of a number of letters designed to remind staff of the conduct requirements of the bank”.
The applicant’s account of her conduct.
In her evidence the applicant did not dispute that her actions in relation to the Peart withdrawals contravened the respondent’s procedures. Her explanation for her failure to use Ms Peart’s written withdrawal forms was that she mislaid them. After the horse purchase had not proceeded, she had advised Burke that she would disburse the moneys as required. Ms Peart gave evidence that she was aware of the arrangement and had signed a number of withdrawal forms. The applicant admitted that although she saw Ms Peart on virtually a daily basis, she had failed to utilise those forms for the withdrawals, or obtain additional forms.
In a letter to the respondent dated 18 September 1995 (Exhibit R2) she admitted that her actions “were a breach of bank policies” and “inappropriate”. She maintained, however, that she did not believe that what she had done was a “hanging offence”. She admitted that she had received circulars from the respondent detailing cases where officers were dismissed for misconduct but was unaware of any relating to unauthorised withdrawals. She said she believed she would, at worst, have been demoted as a result of her actions.
She gave evidence of a number of occasions where she had transacted on accounts other than her own where proper written authority was not in place. She maintained that it was common practice within the bank that this occurred, particularly in relation to family members. When asked, however, how she would record a verbal instruction from an account holder to her to make a withdrawal she said that she may have signed “A Gellie ... as per telephone conversation”.
The applicant called evidence from three other bank officers to support her argument that the practice of withdrawals without proper authority occurred. The evidence, however, did not rise to suggest that any bank officer would process a transaction where the name of the customer was signed by the staff member without any explanation. Mr Brendan Hayes said that such an action would “be regarded very seriously by the bank”. Mrs Jillian Gale said she knew of other staff members operating accounts of members of their family but she didn’t know what they had signed. She knew such a practice was a serious breach of the rules and would not be condoned. The applicant’s last manager, Ms Colleen Spencer, said there shouldn’t be any occasion where an action similar to that of the applicant’s occur. The bank would “frown on it”.
The applicant admitted that she had lied at first about the withdrawal forms in the interview. She maintained that she had just made up at the time the story about Ms Peart signing the forms with a broken hand. Ms Peart gave evidence that she had found out from the applicant after the applicant had been interviewed by the police that the bank was to interview the applicant about the withdrawals.
It was the applicant’s evidence that while the issue of the withdrawals on the Peart account had been raised in the discussion with the bank officers about resignation on 14 September, the issue of the “lie” in the record of interview had not been raised. The first time that she became aware that the respondent took a serious view of that aspect of the matter was in the letter of dismissal.
Did the respondent have a valid reason to dismiss the applicant?
In two recent decisions I have considered the approach of the court to the question of the validity of a reason for a dismissal in misconduct cases: Suares v Commonwealth Bank of Australia (Murphy JR, 10 May 1996, unreported) and Cohen v Orient Trading Pty Ltd (Murphy JR, 31 May 1996, unreported). I adopt that analysis in this case. The comments of Dixon and McTiernan JJ in Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66 at 81 on the meaning of misconduct are apposite:
“Conduct which in respect of important matters is incompatible with the fulfilment of an employee’s duty, or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee, is a ground of dismissal.”
It was the respondent’s case that it had investigated the applicant’s actions, invited her to respond to the allegations against her, and then formed the view that the applicant had been guilty of serious misconduct. It had further formed the view that its operational requirements required that her services be terminated. The actions of the respondent in this respect are consistent with those endorsed by the court in cases such as Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, Kenefick v Australian Submarine Corporation (1995) 62 IR 107 and Sangwin v Imogen Pty Ltd (trading as Carleton Custom Upholstery) (von Doussa J, 8 March 1996, unreported).
The applicant’s criticisms of the respondent’s reason for her dismissal were put on a number of bases. The first was the length of the investigation. It was said that from 21 July 1995, the date of the interview, the respondent knew that the applicant was, on its version, dishonest, yet kept her employed as a bank teller until it finally dismissed her on 25 October 1995. The respondent’s response to this was that the respondent over this period was further investigating the matter and ensuring that it had all relevant facts so that it could make a proper decision in relation to the applicant’s fate.
A further criticism made by Counsel for the applicant was that on the material before it the respondent could not form the view that the applicant was dishonest. It was put that the “lie” in the record of interview was only momentary and immediately retracted. It was put that the investigator, Mr Forkgen, did not regard it as of significance at the time, and that this was confirmed by the fact that it was not raised at the “resignation” interview on 14 September. When the respondent relied on this aspect of the applicant’s behaviour in its reasons for dismissal, it had denied her procedural fairness by failing to alert her earlier to the importance it attached to the matter.
The respondent replied that that submission distorted the evidence and the reasoning process of the respondent. It was put that the “lie” in the record of interview followed from the explanation of the unauthorised withdrawals from the Peart account. It was said that from the time of the resignation interview, the applicant knew that all her actions in relation to those withdrawals were under scrutiny and was invited to proffer a response to the respondent.
Counsel for the applicant also attacked the validity of the respondent’s reasons on the basis that a decision to dismiss the applicant was, given her good service, and the overall circumstances of the Burke transactions, disproportionate to her actions. It was submitted that other lesser measures were open to the respondent and that the respondent failed to properly look at the circumstances of the transaction. It was put that at all times the applicant was trustee for Burke of the funds involved. She had verbal authority from Peart to undertake the withdrawals. There was no attempt to reproduce Peart’s signature and so there was not dishonesty in a criminal sense. Further the applicant had, at her own initiative, brought the Burke transactions to the attention of the respondent, as she was encouraged to do in the Statement of Professional Practice. Counsel for the applicant also referred to the inability of the respondent to point to any specific circular that indicated that withdrawals on accounts without proper authority would lead to dismissal. This contrasted with the explicit statement to this effect in the circular released after the applicant’s dismissal. It was suggested that this led to the conclusion that it was really the Burke transactions that were the real reason for the termination. Alternatively, the applicant was dismissed because of the potential for the respondent to be embarrassed by what had happened in those transactions.
The respondent’s reply to this submission was that it was open to the respondent to form the view that the applicant was dishonest. The dishonesty was stated to be “writing a name on the withdrawal form such as would give an uninformed reader an erroneous impression of what occurred”. It was submitted that the applicant’s false denial in the record of interview was evidence that she knew what she had done was seriously wrong. It was submitted that honesty was a cardinal rule of banking and that the applicant’s actions indicated that she did not meet the standards expected by the respondent and thus was guilty of misconduct. It was submitted that had the media not become interested the Peart transactions would never have come to notice. It was also argued that the respondent did not have to specify in advance each particular act that would result in dismissal but was entitled to lay out its standards in general terms and act when it found a breach of those standards.
Despite the eloquence of the attack made on the respondent’s reasons by Counsel for the applicant, I find it unconvincing. The respondent, to the knowledge of the applicant, and to all its staff, has a policy that it requires honesty in all dealings by its staff. The applicant, while she was not dishonest viz a viz Ms Peart, did engage in conduct which the respondent was entitled to view as being inconsistent with the standards of honesty set out in the Statement of Professional Practice. Those standards were repeated in the respondent’s Personnel Manual (Exhibit R14). The standards had also been referred to in general terms in circulars issued from time to time that, I am satisfied, came to the attention of the applicant. It was not contended that those standards were inappropriate. Nor could it be. I am unable to accept the applicant’s evidence that she never appreciated the seriousness of her actions, the predicament that she was in, and that she might be dismissed. In her first contact with the bank in relation to the matter she advised the Central Branch Manager that she was worried that the bank might take action in relation to her position. This was confirmed in the record of interview on 21 July.
The applicant has failed to satisfactorily explain to the Court, or to the bank previously, why she took no action to bring to the bank’s attention the Peart transactions until she was confronted with them in the record of interview on 21 July. It is fair to conclude she has engaged in a course of conduct over the period of the nine transactions, then suppressed the matter until pressed in the interview over seven months later. Her initial dishonest response, given this lapse of time, was such that it was open to characterise her overall actions as misconduct. The same applies in relation to the way she dealt with the withdrawals. Even on her own evidence, and the witnesses called on her behalf, she was unable to point to any cases where a signature on a withdrawal would be passed off for that of another person. She made it appear to all the world, except herself, that it was Ms Peart operating on the account. I am satisfied that she knew that her actions in relation to the nine withdrawals were in breach of the bank’s policy regarding authorisation of third party actions on accounts, and further that she knew that this was a serious matter as far as the bank was concerned. Her failure to alert the bank to her actions, even when she brought the Burke matters to the bank’s attention, is testimony to this state of mind.
When the applicant’s action are laid against the respondent’s standards, and indeed community standards generally, her conduct meets the test laid down in Blyth Chemicals (above). It was misconduct because it was destructive of “the necessary confidence between employer and employee”. It was misconduct because she “disregarded the essential conditions of the contract of service” : Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285 at 287. The respondent formed the conclusion that the applicant’s actions constituted misconduct. It honestly and reasonably held that view on the material before it. The fact that it took some time to reach that conclusion does not destroy the validity of the conclusion. Cf. Mason v Electricity Commission of NSW (1995) 62 IR 436, 443. The criticisms of the procedures involved also do not destroy the validity of the conclusion: Byrne v Australian Airlines Ltd (1995) 131 ALR 422 at 434, 462-464; see also Puccio v Catholic Education Office and Anor. (von Doussa J, 17 May 1996, unreported) and Fryar v System Services Pty Ltd (von Doussa J, 10 May 1996, unreported). I am satisfied, on the evidence of Mr Rosbrook, that the respondent’s reasons were those set out in its letter of termination. They were essentially that as a result of the Peart matters and the interview, it had lost confidence in the applicant.
The respondent has discharged its onus of proof under s170EDA(1) of the Act that it had a valid reason to dismiss the applicant on 25 October 1995.
Procedural fairness - s170DC of the Act.
I have already referred to Counsel for the applicant’s criticism of the procedure associated with her dismissal. When the actions of the bank are looked at in their totality I am not satisfied that the criticism made of the procedure here is such that the bank’s actions are in breach of its obligations under s170DC of the Act. The applicant, before being interviewed, was given a formal caution in relation to the statements that she made. At the end of the interview, Mr Forkgen indicated to her that “we may have to get confirmatory withdrawals off (Ms Peart) and I am not in a position to say what the Bank will say about it, but I mean, it was that obvious it had to be said, so!”
Given the record of interview, which included seeking the applicant’s comments on the nine Peart withdrawals, it is difficult to see how the applicant can claim that she was unaware of the allegations that were putting her job in jeopardy. The nine withdrawals, ex facie, were false documents. The applicant was asked to explain them. It must have been clear to the applicant after the interview, and when she was requested to tender her resignation on 14 September, that the bank was concerned about her actions in relation to both the Peart and the Burke matters. The applicant directly addressed these matters in her letter to the respondent dated 18 September 1995
It was clear to her when she was offered the opportunity to resign that the respondent was not accepting what the applicant had told it and was seeking her resignation. I am not satisfied in the circumstances that the respondent was required to go further and advise the applicant at that stage that her initial response on the question of the Peart withdrawals was a matter that was to be included in the respondent’s reasons for her dismissal.
In relation to the Peart withdrawals, this was a case where the recent comments in Wyndham Lodge Nursing Home Inc. v Reader (Wilcox CJ, Ryan and North JJ, 15 April 1996, unreported) are apposite:
“In a case where an employee knows the allegations being made, it is not necessary for it to be stated. For example, an employee may be caught in an act of apparent wrongdoing. Then it may be sufficient simply to ask for an explanation of what the employee is doing, without expressly stating the allegation. The allegation will be implicit in the circumstances in which the employee is required to give an explanation.”
I am not satisfied that s170DC of the Act has been breached here.
Harsh, unjust or unreasonable - s170DE(2)
In Byrne (above) at 463, McHugh and Gummow JJ endorsed the following comment on the phrase “harsh, unjust or unreasonable” made in Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20 at 28, per Sheppard and Heerey JJ:
“These are ordinary non-technical words which are intended to apply to an infinite variety of situations where employment is terminated. We do not think any redefinition or paraphrase of the expression is desirable. We agree with the learned trial judge’s view that a court must decide whether the decision of the employer to dismiss was, viewed objectively, harsh, unjust or unreasonable. Relevant to this are the circumstances which led to the decision to dismiss and also the effect of that decision on the employer. Any harsh effect on the individual employee is clearly relevant but of course not conclusive. Other matters have to be considered such as the gravity of the employee’s misconduct.”
These comments have been applied in a number of cases in the court. Here, an important consideration is that the respondent has a very strict policy when dealing with employees who breach the high standards of honesty referred to in the Statement of Professional Practice. It has dismissed employees in the past in what Mr Rosbrook said were similar circumstances. The respondent takes the view that “there are no degrees of honesty” and either “we condone it or we don’t”. This is a weighty consideration in favour of the respondent.
Boland v Maningrida Council Inc. (24 April 1996, Wilcox CJ, unreported), involved an employee who was dismissed because his gross neglect of duties led to the loss of $5,000.00. The respondent took a serious view of the actions of the applicant even though the court held that it had not been able to make out a direct causal relationship between the neglect and the loss. Further it had not relied on any dishonesty. Wilcox CJ held that it had discharged its onus under s170DE(1). Turning to s170DE(2) he said :
“He was dismissed because he neglected to follow simple, commonsense procedures with which he was well familiar. There was nothing harsh, unjust or unreasonable about that.”
Here the applicant was an experienced bank officer and her account as to why she did not follow what were relatively simple procedures was unconvincing. It is also a serious matter for an employee in a bank to pass off, in a number of transactions over a period of weeks, a signature that she knows is not that of the person it purports to be. It is also serious to suppress the matter for some months and then initially lie when asked for an explanation. The nature of the misconduct here, and the lack of honesty displayed, in my view significantly outweigh the impact the dismissal will inevitably have on the applicant. The dismissal therefore was not harsh. It was not unjust because I am satisfied that it was arrived at after a proper procedure and the facts relied on have been made out.
The dismissal I am satisfied was also not unreasonable. In Gregory v Philip Morris Ltd (1988) 80 ALR 455, at 457, when considering the meaning of the word “unreasonable”, Jenkinson J said it should be understood in the sense:
“which it has come to bear in many legal contexts when applied in characterisation of human conduct, that is, failing to conform to a course of conduct which a reasonable person would, in the judgment of the tribunal of fact have adopted in all the circumstances. The question is whether the termination was unreasonable is one of fact . This question requires a determination, by a reference to moral values and prudential considerations current in the community, of what the tribunal of fact thinks a reasonable employer in the circumstances would have decided to do at the time when the respondent terminated the appellant’s employment.”
This statement has been applied in Jones v Department of Energy and Minerals (1995) 60 IR 304, and Aitken v Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia - Western Australian Branch (1995) 63 IR 1.
Applying this dicta I am not satisfied that the respondent acted unreasonably. It maintains high but reasonable standards. It expects its employees to maintain high standards of honesty. The applicant did not dispute that she was aware of the standards required. The applicant’s actions took her below standards the respondent has consistently maintained. Having regard to the applicant’s misconduct the respondent has not acted inconsistently with “moral values and prudential considerations current in the community”.
The applicant has failed to satisfy her onus of proof under s170EDA(1) of the Act that the termination of her employment infringed s170DE(2) of the Act.
Notice - s170DB(1)
The applicant was dismissed without notice. For the same reasons as those relating to s170DE(1) of the Act the respondent was entitled to rely on s170DB(1)(a) of the Act because the applicant was “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”. Having regard to the importance that the respondent places on its Statement of Professional Practice and on the honesty of its employees, I am satisfied that the respondent was entitled to characterise the applicant’s conduct as serious misconduct and thus there has been no breach of s170DB of the Act.
The applicant has not made out any contravention of the Act. The application must be dismissed.
MINUTES OF ORDERS
THE COURT ORDERS:
That the application is dismissed.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
I certify that this and the preceding twenty-two (22) pages are a true copy of the reasons for judgment of Judicial Registrar Murphy.
Associate:
Dated: 5 July 1996.
Solicitors for the Applicant: Dobson Morrow
Counsel for the Applicant: Mr J Larkins
Solicitors for the Respondent: I F Purbrick
Counsel for the Respondent: Mr B Dennis
Date of hearing: 3, 4 and 5 June 1996
Date of judgment: 5 July 1996.
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