Hatchett v Bowater Tutt Industries Pty Ltd (No 2)

[1991] FCA 188

Re: CHRISTINA HATCHETT
And: BOWATER TUTT INDUSTRIES PTY LTD
No. S I6 of 1990
FED No. 188
Industrial Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIAN DISTRICT REGISTRY
INDUSTRIAL DIVISION
Von Doussa J.(1)

CATCHWORDS

Industrial Law - application for the imposition of a penalty - whether breach of an award - whether termination of employment was harsh, unjust or unreasonable.

Industrial Relations Act 1988, s.178

Metal Industries Award, clause 6(d)(vi)

HEARING

ADELAIDE

#DATE 16:4:1991

Counsel for the applicant: Mr J.R. Rau

Solicitor for the applicant: Johnston Withers

Counsel for the respondent: Mr A.D. Short

Solicitor for the respondent: Baker O'Loughlin

ORDER

The application be dismissed.

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

JUDGE1

The applicant, who at material times was a member of the Amalgamated Metalworkers Union, an organisation of employees registered under the Industrial Relations Act 1988 ("the Act") seeks the imposition of penalties upon the respondent pursuant to s.178 of the Act. Further, in the accrued jurisdiction of the court she seeks damages for breach of contracts of employment. In the pleadings the applicant alleges the respondent twice broke the terms of clause 6(d)(vi) of the Federal Metal Industries Award in that it dismissed her from employment in contravention of that clause on 12 July 1989, and after her re-engagement, did so again on 3 November 1989. Clause 6(d)(vi) relevantly provides:

"(vi) Unfair dismissals Termination of employment by an employer shall not be harsh, unjust or unreasonable. For the purposes of this clause, termination of employment shall include terminations with or without notice."

1. The respondent carried on business in several divisions. The applicant was employed through the division known as Delta Electronics. She was first engaged on 27 February 1989 as an electronics technician. It is common ground that the respondent was bound by the Award. Delta Electronics was a small undertaking, employing only 8-11 people during 1989. It specialised in making programmable logic controllers ("plc's") which comprised printed circuit boards to which were affixed a considerable number of small electronic components of various kinds. The electronic components were manually fitted in pre-determined positions on the printed circuit, and soldered into place, by process workers employed by Delta Electronics.

2. The duties of the applicant as an electronics technician required her to test plc's put together by the process workers, and locate and repair faults. As the result of events which occurred on 12 July 1989 the applicant ceased to work as an electronics technician and commenced to work as a process worker assembling plc's. By the pleadings, the applicant alleges that on 12 July 1989 her employment was terminated, and that she was then re-engaged in the different capacity of a process worker which attracted a lower award rate. The respondent denies that there was a termination of employment and says that the applicant was merely reclassified in a lower position because she lacked the technical skills necessary to perform the tasks required of an electronics technician, a reclassification which she accepted at the time. The applicant's pleadings assert that the reason assigned by the respondent for the change - that she was unable to carry out the duties required of her - was false, and that the real reason was that other workers in the factory would "send her to Coventry" if she were not dismissed.

3. The applicant says that on 12 July 1989 she was called into the office of Mr Mitchell, the Manager of Delta Electronics. Mr Mitchell told her he had to give her notice as he had received a letter from Mr Craig Burnett (an engineer employed by Delta Electronics) which said that another employee, Brian, who was employed as a process worker was better qualified than the applicant, and should be given her job. If this did not happen the letter said the other employees would "send her to Coventry".

4. The evidence of Mr Mitchell, which I accept, confirms that he had received a letter from Mr Burnett on 10 July 1989 which dealt with the structure of supervision in the workshop. The letter however was not to the above effect. It described the applicant as a "good worker", but referred to shortcomings in her skills and suggested certain changes. Mr Mitchell had by this time already formed the opinion that the applicant lacked the requisite skills for testing and repairing - and his opinion is borne out by the evidence of the supervisor of the process workers, Mr Duncan McDonald, and by Mr Tim Burke. I accept the evidence of these men. By the time of trial Mr Mitchell had retired, and the other two men had been retrenched from Delta Electronics. This occurred at Christmas time 1990 when the manufacture of plc's was wound up. None of them had any apparent motive to support the position of the respondent. I thought each of them gave evidence in a fair and objective way.

5. Contrary to the evidence of the applicant I find that on 12 July 1989 Mr Mitchell said nothing about the other workers sending her to Coventry. He told her that she was unable to carry out her duties. This was correct in fact, and was the real reason for the change in her classification which occurred that day. I find that when Mr Mitchell informed the applicant that she was not up to the position, he also suggested she should resign. She refused saying she could not afford to go. Mr Mitchell then offered her a position as a process worker assembling plc's although at a lower rate of remuneration. At the time the applicant agreed that the change in her duties was reasonable, and she accepted the drop in pay without protest. Matters such as accrued holiday pay and sickness entitlement were not addressed at all. The applicant viewed the new position as one which would increase her experience.

6. I accept the evidence of Mr Mitchell that he was concerned whether the applicant's skills were adequate for the position of a process worker, and informed her orally that her performance in the new position would be under continuing review. This was confirmed by him in a letter to the applicant dated 12 July 1989.

7. The decision of Mr Mitchell to move the applicant to process work is not consistent with a statement by him that if he did not dismiss her she would be sent to Coventry by the other workers. The Delta Electronics technicians and process workers all worked in one common area. The evidence of Messrs Mitchell, McDonald and Burke, and the terms of the letter from Mr Burnett to Mr Mitchell, lead me to find that it was not until much later - towards the end of her employment - that the applicant formed a belief that the other workers would send her to Coventry, and it was she who then raised the topic.

8. The events which happened are inconsistent with there being a termination of employment followed by a re-engagement on 12 July 1989. The evidence fails to establish the applicant's contentions about what happened on 12 July 1989, and in his final address counsel for the applicant correctly conceded that a dismissal on 12 July 1989 had not been made out.

9. It is common ground that the applicant's employment was terminated by the respondent on Friday 3 November 1989. The applicant contends that the circumstances of the termination rendered it harsh, unjust or unreasonable. It is also common ground that:
   

* on Friday 13 October 1989 Mr Mitchell gave the applicant a "first warning", confirmed in writing which stated the reasons for the warning as: "1) Work not up to the standard required after two months. 2) Taking far to (sic) long to complete the work." * on Friday 20 October 1989 Mr Mitchell in the presence of Mr McDonald gave the applicant a "second warning", confirmed in writing which stated the reasons to be: "1) No improvement of work standard 2) Unable to co-operate with other workers thus disrupting production." * on Friday 3 November 1989 when the applicant's employment was terminated she was given the reason, confirmed in writing, that: "No improvement in work standard. In fact it has declined." At the same time she was given one week's pay in lieu of notice and the appropriate payment for accrued holiday entitlement.

1. The particulars given by the applicant in support of her claim that her dismissal was in contravention of clause 6(d)(vi) of the Award are important as they identify the real issues upon which the matter has come to trial. I set out the particulars of the "circumstances" alleged by the applicant to have rendered her dismissal harsh, unjust or unreasonable:
   

"4.4.1 The said 'circumstances' were that the reasons given for the termination namely, that her work performance was unsatisfactory and that she was unable to get on with the other workers were false. Further that the applicant had been given two previous warnings regarding unsatisfactory work performance which were false and without any substance. The applicant claims the real reasons for her termination included both the same reason as conveyed to her by Richard Mitchell on the 12th day of July 1989, namely that the other workers would send her to 'Coventry' if she were not dismissed and further because she was the only woman employed in the capacity of Electronics Technician or Process Worker and the only member of a union employed in either capacity by the respondent."

1. The evidence of the applicant differed considerably from that of Messrs Mitchell, McDonald and Burke about events which occurred in October 1989 at the time when the warnings were given. I prefer the evidence of Messrs Mitchell, McDonald and Burke. I find that the real reason which motivated Mr Mitchell to give the warnings, and to terminate the applicant's employment, was the quality of her work. I find that the quality of her work was poor, as Mr Mitchell and the other witnesses described in evidence.

2. The applicant gave evidence that later on 13 October 1989, after the first warning, she again spoke with Mr Mitchell and asked if he were intending to sack her. He said "Yes". She said: "Why don't you do it now?", and he replied: "I will do it in my own time and in my own way". The thrust of this evidence was that the warnings were not genuine, but a charade to give the colour of procedural fairness to an impending dismissal. I reject this evidence from the applicant. I accept Mr Mitchell's evidence that he said on this occasion, and meant, that if the applicant's work standard improved there would be no question of her dismissal.

3. The assembly of the plc's was relatively simple work which someone who had undergone the training course at ITECH, which the applicant had completed, should have been able to perform satisfactorily after a week or so on the job. Thereafter even a good worker could be expected to make a few soldering and other mistakes as there are often a very large number of soldering joints and small components packed on to a plc (the exact number depends on the plc model). It was for this reason that all plc's were inspected by either Mr McDonald or Mr Burke. Errors discovered by them would be marked with red arrows, and the relevant plc then returned to the process worker who had assembled it to be reworked. In the applicant's case the number of faults, particularly soldering faults, greatly exceeded the number of faults to be expected. The quality of her work was such that Mr Burke in about early October 1989 asked to be relieved from the responsibility of inspecting her work. He felt that the number of faults he was marking on her work was leading to tension. It seems this was so as the applicant about the same time complained to Mr Mitchell that Mr Burke was victimising her. Mr Mitchell's own inspection of the applicant's work confirmed many faults. Mr McDonald was then asked to inspect all the applicant's work, and to keep a record of the outcome of his inspections. Exhibit R2 is a summary of faults found on 12 plc's inspected on 1 November 1989. I am satisfied by the evidence that the assessment made by Mr McDonald, and recorded by him in exhibit R2, was a fair and reasonable assessment, and one which shows that the applicant's work was far below an acceptable standard. The applicant herself concedes that if the faults recorded on exhibit R2 were present, the work on the plc's was unsatisfactory.

4. At trial it was suggested that Mr McDonald may have gathered up and inspected the plc's referred to in exhibit R2 before the applicant had completed working on them. The evidence however is clear that the plc's had been put out for inspection by the applicant as completed work. I am satisfied that the applicant was aware of the inspections being conducted by Mr McDonald on 1 November 1989, and was made aware that day of the number of faults which he detected.

5. On 3 November 1989 exhibit R2 was brought to the attention of the applicant as proof that her work standard remained unsatisfactory. Her response at first was to allege that the plc's had been tampered with. A technician was called in to give another assessment. He said the boards had not been tampered with, but the applicant treated his statement as further evidence that the other workers were acting in unison to bring about her dismissal. At trial the applicant said she no longer alleged that the plc's had been tampered with, but she said exhibit R2 was a "fabrication".

6. Unfortunately even now the applicant does not acknowledge that her work was substandard - as the evidence clearly shows that it was. Her refusal to acknowledge that her work was not up to standard lies behind other complaints which she makes. It is clear that by October 1989 serious tensions had arisen between the small number of workers at Delta Electronics. Mr Burke, for example, even though he was kindly disposed towards the applicant, found the task of inspecting her work stressful, and because she would not recognise that her work was below standard she accused him of victimising her. By this time other workers were tending to avoid conversation with the applicant. The picture which emerges is that the applicant was becoming angry and suspicious as her work was being criticised, unfairly as she perceived the situation. She would not speak to others in the work place at times. It was this conduct which was referred to in the second warning as an inability to co-operate.

7. In October 1989 a separate issue arose over time off work allowed to the applicant to undertake study. She and the pay clerk - a person housed in a different building and a different division of the respondent's business - could not agree over the computation of the applicant's hours and overtime hours. Mr Mitchell first became aware of this disagreement on 20 October 1989 - after the first, and probably after the second warning had been given. The disagreement over hours seems clearly to be unrelated to the giving of the warnings. On Monday 23 October 1989 Mr Mitchell signed and promulgated two memoranda prepared by the pay clerk, the effect of which was to deprive the Delta Electronics workers of a paid morning tea break. Apparently by oversight of management, the morning tea break had hitherto been treated as part of the paid hours. The applicant concedes that none of the other employees said anything to her on or after 23 October 1989 about the memoranda, or about her being the cause of the change. However the other workers were not pleased about the change, and it seems the applicant assumed that they would blame her for it. Whilst this may have been her assumption, the evidence of Messrs Mitchell, McDonald and Burke lends no support to the applicant's evidence that the workers, at any stage, had any plan to send her to Coventry, or even that by concerted action they were doing so. There had been tension in the work place but no mention of sending the applicant to Coventry. On about 26 October 1989 the applicant complained to Mr Bauer, a union organiser, that the first and second warnings had been unfairly given to her, and she said she was being sent to Coventry as the other workers blamed her for the abolition of the paid tea break. This appears to be the first reference to the topic. I find that the termination of the applicant's employment by Mr Mitchell was not based alone or in part on any threat or plan by the other workers to ostracise the applicant.

8. The other two reasons alleged by the applicant for the termination of employment, namely that she was the only woman employed by Delta Electronics, and that she was the only union member, find no support in the evidence. Both reasons are denied by Mr Mitchell. Women on other occasions had been successfully employed by Delta Electronics. No evidence of overt acts suggesting discrimination on either of the grounds alleged was led by the applicant. The applicant did not join the union until 1 October 1989, and no one at Delta Electronics knew she was a union member until 23 October 1989, after the second warning had been given. It is significant that when the circumstances of the termination of her employment were canvassed by the applicant in proceedings in the Industrial Relations Commission in January 1990, she made no mention of either of these matters as being reasons for the termination.

9. The applicant has therefore failed to establish that the reason given for the termination of her employment on 3 November 1989 - an unsatisfactory work standard - was false and she has failed to establish any of the reasons for the termination alleged by her. In the course of the trial evidence was led on behalf of the applicant which strayed beyond the formal particulars of the circumstances said to constitute the termination harsh, unjust or unreasonable. In particular it was suggested that she had been given insufficient counselling and training to overcome shortcomings in her work performance. It is sufficient to say that in my opinion the evidence on the topic of training and counselling could not further the applicant's case even if that topic had been pleaded as a relevant "circumstance". The applicant came to the respondent as a person who had completed a training course which should have given her all the skills necessary for the job of a process worker. When it became apparent that she was repeatedly making basic errors in soldering Mr Burke did give the applicant assistance, and the applicant herself, at least in the early stages, often sought out and was given assistance by other workers.

10. On 26 or 27 October 1989 there was a meeting between Mr Bauer, the applicant, Mr Mitchell and another member of the respondent's staff. At that meeting the warnings which had been given to the applicant were discussed. Mr Bauer suggested that the respondent had not followed procedures laid down in the Award, and that the warnings should be withdrawn. Mr Mitchell contended that the warnings had been correctly given and refused to withdraw them. I am unable to detect any irregularity under the Award in the conduct of Mr Mitchell. In any event it is not alleged by the applicant that there was any procedural irregularity by the respondent which rendered her termination harsh, unjust or unreasonable. For this reason also nothing turns on the fact that Mr Bauer was not present on 3 November 1989 when notice of termination was given to the applicant. Evidence was led on this topic, and for completeness I add that I accept the evidence of Mr Mitchell that at the meeting with Mr Bauer he agreed that a union representative could be present at any future discussion with the applicant, not that he would contact the union if there were to be a discussion. And on 3 November 1989 when the applicant indicated that she wished a union representative to be present when Mr Mitchell spoke to her, Mr Mitchell, deferred their meeting for about one hour to enable her to contact the union.

1. In my opinion the applicant has failed to establish any of the "circumstances" upon which she relies to show that her termination was harsh, unjust or unreasonable. On the contrary the respondent has established that the reason for the dismissal was that which was given, that the reason was one of substance, and that Mr Mitchell reasonably believed that any course of action short of terminating the applicant's employment was not likely to bring about the required improvement in the standard of her work.

2. The claims for the imposition of penalties under s.178 are therefore dismissed.

3. This conclusion makes it unnecessary to consider the alternative claim for damages. It may be accepted in the circumstances of this case that clause 6(d)(vi) of the Award became a term of the applicant's contract of employment: see the terms of the letter of appointment dated 27 February 1989, and Gregory v. Philip Morris Ltd (1988) 80 ALR 455. However no breach of that contractual term has been made out.

4. I record that the parties were agreed that I should first decide whether or not a contravention of clause 6(d)(vi) had been proved, and that liberty was reserved to the parties to adduce further evidence relevant to the assessment of penalty and damages in the event that it became material to do so.

5. The application will be dismissed.