Isaacs v Link Telecommunications Pty Ltd

[1997] IRCA 177

DECISION NO:177/97

C A T C H W O R D S

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - VALID REASON - whether breach of company policy in fighting in the workplace justified termination

Workplace Relations Act 1996 ss 170DE(1), 170DC

Nettlefold v Kym Smoker Pty Ltd (1996) 69 IR 370

Thomas v Ralph Lynch (unreported, Industrial Relations Court of Australia, Wilcox CJ, 20 December 1996)
Wadey v Y.W.C.A. Canberra (unreported, Industrial Relations Court of Australia, Moore J, 12 November 1996)

DEON ISAACS  - v -  LINK TELECOMMUNICATIONS PTY LTD

No. VI 2727 of 1996

Before:          Judicial Registrar Millane
Place:            Melbourne
Date:              3 June 1997

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI 2727 of 1996

B E T W E E N :

DEON ISAACS
Applicant

A N D

LINK TELECOMMUNICATIONS PTY LTD
Respondent

MINUTES OF ORDERS

Judicial Registrar Millane     3 June 1997

THE COURT ORDERS THAT:

1. 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 2727 of 1996

B E T W E E N :

DEON ISAACS
Applicant

A N D

LINK TELECOMMUNICATIONS PTY LTD
Respondent

Before:          Judicial Registrar Millane
Place:            Melbourne
Date:              3 June 1997

REASONS FOR JUDGMENT

On 11 November 1996 the applicant’s employment from 11 September 1995 as a sales consultant was terminated by the respondent on the grounds of misconduct. On that date he was paid 112 hours pay in lieu of notice. By an application filed on 18 November 1996 the applicant alleges that the termination contravened section 170DE(1) and section 170DC of the Workplace Relations Act 1996 (the Act) and he now seeks compensation.

THE WITNESSES

The applicant gave evidence on his own behalf.  The respondent called the following witnesses:

-Benjamin Fisher (Fisher), a retail communications consultant employed by the respondent;

-Eric Laurence Norton (Norton), the respondent’s retail manager for Victoria; and

-Denis Masseni (Masseni), who at the relevant time was employed by the respondent as its national retail manager.

THE EVIDENCE

On Saturday 9 November 1996 the applicant and Fisher were both working at the respondent’s Dandenong retail outlet.  It was common ground that the store usually had a Sun Herald newspaper delivered each day, however, on that day the applicant arranged for The Age newspaper to be purchased also.  At closing time when only the applicant and Fisher were left on the premises, there was a verbal and physical altercation between the two over who was authorised to take The Age newspaper home that evening.

Fisher’s version of what took place was that it was his belief that on 9 November 1996 the applicant wrongly used money from the till to order and pay for The Age newspaper which was not usually ordered at the Dandenong store.  Angela O’Connor, the store manager, did not give evidence, however, it was Fisher’s evidence contested by the applicant that O’Connor had chastised the applicant concerning the purchase of the newspaper and Fisher was given permission by Angela O’Connor to take the paper home that evening.

When closing time arrived Fisher was behind the counter and the newspaper was on the counter.  The applicant came to the front of the counter opposite Fisher and was told by Fisher that O’Connor had given him permission to take the newspaper home.  The applicant responded by saying he was taking it and took it off the counter.  Fisher walked around the counter and told the Court that as he did so the applicant stepped backwards and Fisher reached to take the paper saying at the same time “Angela has instructed you not to take the paper ...”.  When he attempted to take the paper the applicant moved backwards again and this caused Fisher to desist and say words to the effect that it did not matter because his understanding was that the applicant had no future with the respondent anyway.  The comments made by Fisher upset the applicant, who stepped forward and with his free hand pushed Fisher’s shoulder.  Fisher’s response was to use two hands to push the applicant in the chest and with that a fight ensued with wrestling, headlocks and rolling around on the floor.  According to Fisher when he was on the floor he thought he could feel punches but could not see this happening.  At some point the applicant said words to the effect “... that’s enough” and let go of Fisher.  They both stood up and as Fisher regained his feet he alleges and this is denied by the applicant that the applicant tripped and pushed him causing him to fall to the floor.  It was this fall Fisher says caused an injury to his wrist necessitating medical treatment and the wearing of a cast for some six weeks after the incident.  When he regained his feet Fisher told the applicant “That’s it you’re done for ...”.  He then went to the telephone to ring head office and whilst he was attempting to get on to someone at head office the applicant disconnected the call telling him that they did not need anyone else involved because they could settle the dispute in the store. 

Fisher was not persuaded by the abovementioned assurance and eventually contacted a manager explaining to him what had transpired.  Subsequently the applicant also spoke to a manager and left the store before Fisher who threw the newspaper in a bin, locked up the store and went home.

During the weekend management telephoned and questioned Fisher who conveyed his version of the incident.  Arrangements were also made for him to meet with Norton on Monday, 11 November 1996 at about 3.30pm. 

The abovementioned meeting lasted up to one and a quarter hours during which time Fisher claims that Norton informed him that he was not concerned about who started the fight.  He expressed his disgust; telling Fisher that he and the applicant were equally responsible and that according to Norton the purpose of the meeting was for Fisher to explain why he should not be summarily dismissed for breaching the company policy against fighting in the workplace.

Fisher took the opportunity afforded to him to say that he did not deserve to be dismissed because of his good work performance and good record.  Fisher claims that Norton was hard on him but fair.  At the date of that interview Fisher had no prior warnings or counselling and had received what he described as verbal citations for his good performance.  When they concluded their meeting Fisher was informed that his future was in the hands of Masseni.  At a subsequent meeting the next day Fisher was given a written warning and it was made clear to him that he would be dismissed if there were any further incidents.

One of the complaints the applicant makes to the Court is that in disciplining the two participants in the fight the employer acted unfairly by dismissing him alone.

The applicant’s version of events on 9 November 1996 is that when the Herald Sun was delivered he also asked for The Age newspaper and no money was sought or paid on that occasion. It was his assumption that there was some tab for payment for the delivery of the newspapers.  He was subsequently questioned by Angela O’Connor who informed him that the respondent no longer had The Age delivered.  He alleges that with his bag and the two newspapers he approached the counter when Fisher was finalising the cash for the day.  The applicant claims that he asked Fisher if Fisher would like the Herald Sun newspaper because he, the applicant, was taking The Age which he said had “a couple of things ...” in it he wanted to read.  Furthermore, he told Fisher Angela O’Connor had indicated that he could take it home.  I note that none of this preliminary exchange was put to Fisher who gave evidence first.  According to the applicant Fisher’s response to what the applicant attempted to portray to the Court as a very reasonable approach by him, was to tell him to “fuck off” as well as to point out that they were all “sick of him and Norton and O’Connor hated him”.  During this tirade of abuse the applicant alleges that, against his calm and rational questioning, Fisher told him he had no future with the respondent and, in effect, accused him of being a thief as well as saying that he was not trusted by others. 

It is the applicant’s evidence that following the abovementioned exchange Fisher came around the counter and pushed the applicant in the chest causing him to “fly” back.  There was further verbal abuse and conversation about whether the respondent would believe the applicant or Fisher and an allegation, denied by Fisher, that he called the applicant a “fucking pussy” before lunging at the applicant.  During all this abuse the applicant claims he kept telling Fisher to calm down.  When they rose from their scuffle on the floor it is alleged by the applicant that Fisher told him he was “fucked” and “out of here” before going to telephone management and report the incident.  It was then that the applicant suggested to Fisher that they work out the problem themselves.  This last comment is consistent with Fisher’s evidence that the applicant tried to stop him from ringing management.

The upshot of the applicant’s evidence is that Fisher started the fight and was the first to push him, when there was no provocation from him, and throughout harangued the applicant with verbal abuse.  He alleges that when they were in the store he paged a manager, saying that what happened was childish and he was sorry it happened.

The applicant’s attempts to stop Fisher from reporting the incident suggest to me that the applicant was then concerned about his actions and the ramifications for him.  It was not put to Fisher in cross-examination that he was the first to push the applicant causing the applicant to push him back.  Neither was it put to Fisher that on the following Monday the applicant, as alleged by the applicant, rang him and apologised telling him he was sorry that it happened.  As will be seen from my analysis of Norton’s evidence below, he too claimed that the applicant was the first one to physically push someone during the fight and he made this claim because the applicant admitted doing this both on the Saturday when the applicant telephoned Norton and on the following Monday when Norton interviewed him before terminating his employment.

Unlike Fisher, following the interview with management during the late afternoon on Monday, 11 November 1996, the applicant’s employment was terminated.

If the only question before the Court was who bore the greater responsibility for initiating the fight, I am satisfied that the applicant’s version of events is a less plausible and a less consistent one.  It was a trivial matter to engage in fisticuffs over, however, the applicant’s initial action brought about a confrontation and both men chose to pursue the resolution of the conflict by an unacceptable means.  I am not satisfied that if, as the applicant alleges he approached Fisher in the manner he claims he did, there would have followed anything like the verbal abuse the applicant claims he was subjected to. 

It was not disputed that fighting in the workplace is misconduct which may lead to termination of employment (see exhibit R1).  It was suggested by the applicant that the respondent had in fact accepted Fisher’s word against his and this was the reason for the dismissal.  However, this interpretation of events is not borne out by what in fact did occur.  The evidence of Fisher, Norton and Masseni establishes that this is not a case where the employer preferred the word of one protagonist against the other in order to impose a harsher discipline.  The approach of the respondent was to treat the episode as a serious breach of policy and to discipline each man; not on the basis that only one was responsible for what happened but on the basis that the severity of the discipline should be determined by reference to any admissions made and the employee’s work history.  At all times Norton was entitled to take into account the admission made by the applicant in determining the seriousness of the episode and the effect on the applicant’s employment. 

The respondent did not terminate Fisher because he was able to demonstrate an exemplary work record.  It did, however, place him on a final warning.  The same circumstances did not apply to the applicant who was the subject of earlier warnings and counselling sessions unrelated to any fighting in the workplace.  Accordingly, when both employees were disciplined the applicant was in a less favourable position because of his antecedents and not because of any discriminatory approach on the part of the respondent.

The applicant commenced his employment with the respondent and worked from its Brighton store for some months before he was transferred to the St Kilda store following two counselling sessions and at least one formal warning concerning his conduct.  The first counselling session related to his punctuality and reliability.  In approximately March 1996 Norton and another manager attended the Brighton store and conducted what Norton described as a counselling session with the applicant specifically aimed at a complaint concerning the applicant’s punctuality and his reliability.  This counselling session touched upon his availability to open the store at the correct hours and his attendance at the store during working hours.  Following the counselling session Norton provided the applicant with the following summary of the concerns raised (Exhibit R2):

“I am writing regarding our current discussion regarding some issues of concern.

Confirming the issues as follows:

i)        Punctuality is vital, recent incidents of lateness are unacceptable.

ii)        If you chose to ride a bike to work you must allow enough time to   change into your uniform before the store opens.

iii)        You must inform your retail manager of all incidents that interfere with                   your ability to get to work on time.  Recently Tom Kalas (in my   absence) requested you return his call when you arrived late to work               and wasn’t responded to.

Deon, it should be understood that these issues must be resolved immediately and fortunately they are within your control to do so.  In one sense, attitude issues are amongst the easiest to resolve.

Generally speaking, your performance and skills with sales and customers can be categorised as very good, and with attention to the issues raised here should have a very bright future.”

Whilst the applicant agreed that he discussed the abovementioned matter at a meeting with Norton and another manager, he denied that the meeting was in fact a counselling session.  He claims that the meeting came about because he had sought a promotion to a management position and in discussion of this application the issue of punctuality was raised.  He offered an explanation for one incident he said occurred because he was caught in traffic when he dropped off some relatives at the airport and on this occasion he rang a number of times to let the employer know that he was running late. 

During the meeting in March 1996 Norton agreed that they discussed the applicant’s desire to be a manager, however, the purpose of the meeting was to counsel the applicant because the respondent viewed his approach as unsatisfactory.  According to Norton the applicant did not dispute the allegations made and apologised agreeing to “lift his game”.  Although he did not use the words “warning” in that meeting, Norton took the meeting and memorandum to be in the nature of a warning.  His reason for not expressly warning the applicant at that time was his desire to encourage the applicant to improve his performance and realise his potential as a sales consultant.

I am satisfied that the meeting and the document were in fact directed at counselling the applicant.  His suggestion that it was not a formal counselling session is a disingenuous one.  He clearly understood that his conduct was, on that occasion, in issue and that he was required to remedy his conduct immediately.  Nevertheless, there was no express warning either at the meeting or in the document and, Norton agreed, after that meeting there was no further issue concerning the applicant’s punctuality up until the episode on 9 November 1996.

The second and most significant disciplinary and counselling episode arose out of what was a serious breach of company procedure.  This was because the applicant sold cellular equipment to a friend who at the time he knew was not an Australian resident.  In effect, the transaction was one which exposed the respondent to loss because the person entering into the contract for connection of the telephone and the service was not an Australian resident.  If there was default on the account the respondent had no means of recovering its loss against a non-resident customer whom it was alleged was proposing to leave the telephone with her father in Australia for his use.  The applicant conceded his knowledge of the company policy and the breach involved.  In fact, at hearing he eventually accepted, although not before showing some resistance to the idea, that he was responsible for the incident.  As a result of a complaint made by a manager to Norton about this sale, Norton conducted a further disciplinary interview with the applicant on 17 July 1996 recording it in the following document (Exhibit R3), a copy of which was given to the applicant:

“I am writing further to our meeting on July 17 regarding issues relating to the sale of a phone to Pamelina Clarke on contract number 556905 and related activation form and confirm the details.

You acknowledged that:

i)        Pamelina Clarke has been permanently living in England for 5 years.

ii)        Pamelina Clarke is a personal friend.

iii)        You knew that company policy referring to item “2C. PERSONAL.   Time at address” on the activation form specifically relates to time   spent living at the customer’s current address, not the time they spent   living there up to 5 years ago.

iv)       Pamelina Clarke’s address on the activation form is incorrect and   should be her current address, not where she lived 5 years ago.

v)        You said that her father would be using the phone.  If so he should be                  recorded as “the user” on the contract forms.  Angela O’Connor had            requested you to subsequently do this, but has not been done.

vi)       If Pamelina Clarke’s real details were recorded on the form i.e. current                 address and time spent living there, that she would have been   declined and not approved as a customer.

vii)      Our credit checking process directly relies on the information on the   activation form as the basis for approval or rejection.

vii)      You mistakenly provided two accessories free of charge to which   Pamelina Clarke was not entitled under the prevailing promotion and            that the accessories were returned upon request.

As discussed, several issues of major concern exist.

i)        Several fundamental mistakes occurred:
  a)        Incorrect procedure regarding the free of charge accessories
  b)        the user name was not recorded, even after a request by your   Manger (sic)

ii)        You knowingly and deliberately recorded misleading customer   information, who was a personal friend, vital to the process that would   approve or reject Pamelina Clarke as a customer

iii)        Link Telecommunications is now financially at risk with this customer.                  If the account defaults it will be practically impossible to recover   outstanding moneys as the person who has responsibility for the   account lives in England.  In the first 9 days this phone accumulated                   moneys owing, including connection, access fees and call charges   totalling over $350

iv)       It is unfortunate to see this incident in light of our meeting and   correspondence earlier this year regarding your performance and   punctuality

v)        The issues of trust and competency are now in doubt.

Accordingly you will be permanently transferred to St. Kilda Road retail.

Please understand that this will be a second and final warning.  Your employment will be terminated upon any further breach of company policy or repetition of punctuality issues.”

As can be seen from the last paragraph of the abovementioned document, Norton purported to give the applicant a second and final warning.  What is clear from this document, even if the first counselling session did not constitute a warning, is that the applicant could not then have been under any misapprehension that further breaches of company policy or repetition of punctuality issues would lead to termination of his employment.

Norton told the Court that the respondent viewed the incident with the customer as a very serious breach of policy and one which on another occasion had led to the dismissal of another employee.  With the applicant he acknowledged that the applicant had potential and was a good salesman.  Because of this Norton determined to give the applicant a last chance.  Notwithstanding his preparedness to give the applicant another chance, Norton by then believed that the applicant had initially lied to him about the incident and this caused Norton to hold some real concerns about the applicant’s trustworthiness. 

In August 1996 a further matter came to light concerning the applicant.  It appears that as a result of a police investigation the respondent became aware that there may have been a further breach of company policy by the applicant in signing up a customer whose identification had not been sighted by the applicant before doing so (see Exhibits R6, R7, R8 and R9).  The driver’s licence number supplied by the male customer was that of a female driver.  Not surprisingly, the respondent concluded that the applicant could not have sighted the licence before completing the transaction.  In this instance the respondent incurred a loss because it was a fraudulent transaction.  It investigated the incident and it was Norton’s recommendation to senior management that the applicant’s employment be terminated.  Despite this recommendation, senior management vetoed termination because the incident occurred in late 1995 before the second warning was given by Norton in July 1996. 

The applicant was not cross-examined regarding the lastmentioned incident in which he said he had sighted the customer’s licence and denied breaching any company policy. 

It would be fair to say that by November 1996 the applicant’s credibility in the eyes of the respondent was damaged at least by the incident with his friend and also by the second matter coming to light as it did after he had been formally warned.

Norton agreed that on 9 November 1996 the applicant spoke to him by telephone about the fight and in effect suggested Fisher had “snapped” and lunged at him leading to the scuffle.  Interestingly enough, during that conversation and the final interview Norton claims that the applicant agreed he pushed Fisher first because Fisher was “in his face” and abusive.  However, he denied that he started the fight.  As I have already indicated, it was not suggested to Fisher in cross-examination that he had pushed the applicant first; nor was this put to Norton who gave evidence of the admissions made to him.  Masseni was present at the last interview but could not recall precisely whether the applicant had conceded he pushed Fisher first.  Because of the admission made Norton approached the final interview and the termination of the applicant’s employment on the basis that the applicant had made the first physical contact.  Otherwise, he treated them both as being responsible for the fight; his view being that they both should have withdrawn rather than engage in that level of dispute. 

PROCEDURAL FAIRNESS

The final interview with the applicant was conducted after the meeting with Fisher whose position was not determined until the conclusion of the meeting with the applicant when the applicant was given an opportunity to formally explain what occurred.  What must be kept in mind is that the applicant had already outlined his version of events by telephone on the previous Saturday, however, the formal interview was a further opportunity for him to put his case.

As I have already indicated Masseni’s recollection of the detail of the last interview was very general.  However, it was agreed that at that meeting the incident was discussed again and the previous incidents concerning punctuality and the completion of the customer account documentation leading to the oral and written warnings on 17 July 1996 were all revisited.

I found Norton to be a credible and consistent historian who readily agreed that he did not have a very favourable opinion of the applicant’s trustworthiness when he interviewed him on 11 November 1996.  This opinion, he said, was entrenched by the applicant attempting at that interview to offer excuses for the earlier incidents, which excuses had not been previously raised.  Whatever his views may have been about the applicant I accept that he and the respondent approached the task at hand in a professional manner and whilst both he and Masseni discussed the possibility of termination prior to the interview, they did await the outcome of the discussions with the applicant before Norton finally determined to terminate his employment. 

When the applicant attended the final interview he claims that he did not then view the incident as being serious enough to warrant termination.  It was his belief that he would be counselled about the incident.  I have difficulty in accepting these comments in view of the written and verbal warning received in July 1996.  Regardless of whether that warning contained in Exhibit R3 is treated as a first or second warning, as of 17 July 1996 the applicant was on notice that his conduct was under scrutiny and any future breach of company policy, which policy he agreed included a prohibition against fighting, would lead to termination.   In my view it is likely that it was this knowledge that at first caused the applicant to try and stop Fisher from reporting the fight.

I am satisfied on the evidence that in the termination process the applicant was afforded procedural fairness and had a real opportunity to defend himself and offer reasons for retaining his employment.  However, such defence as he raised was weighed against his somewhat tarnished employment record.

VALID REASON

On the evidence I am further satisfied that there existed at termination a valid reason; namely, misconduct constituted by fighting in the workplace in circumstances where the applicant admitted he was the first person to make physical contact by pushing Fisher away.  In determining whether the conduct complained of gave rise to a sound, defensible or well founded reason for termination I am required to determine whether the termination was justified.  Justice Lee in his decision in Nettlefold v Kym Smoker Pty Ltd (1996) 69 IR 370 expressed the view; which view has since been endorsed in numerous decisions in the Industrial Relations Court of Australia (see, for example, Thomas v Ralph Lynch (unreported, Industrial Relations Court of Australia, Wilcox CJ, 20 December 1996)) that arguably the phrase “valid reason” imposes a requirement that “in all the circumstances a termination of employment at the initiative of an employer not be unjust or unfair”.  In his decision in Wadey v Y.W.C.A. Canberra (unreported, Industrial Relations Court of Australia, Moore J, 12 November 1996), His Honour Justice Moore relevantly observed at page 18 of his decision that:

“... It is not for this Court to approach the matter as if it is to make a decision whether termination should occur or not.  A range of rational and reasonable views may exist as to whether particular conduct warrants termination.  If the view adopted by, or on behalf of, the employer is rational and reasonable then, in my opinion, the employer has established a valid reason for the purposes of s 170DE(1).  In putting it this way I am not attempting to depart from the views expressed by Northrop J in Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373 which have been referred to, with approval, on a number of occasions since.  Lehmann was entitled to view Wadey’s conduct with the gravity she did.  Her decision to terminate was for a valid reason.”

In the case before me it was accepted the respondent was entitled to view fighting in the workplace as a serious matter.  It did this and in my view in considering the explanation given and the employee’s work history as well as the express warning given, it afforded both procedural and substantive fairness and on balance the termination was neither unjust nor unfair in all the circumstances.

Accordingly the order I propose to make is that the application be dismissed.

MINUTES OF ORDERS

THE COURT ORDERS THAT:

1. 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 fourteen (14) pages are a true copy of the reasons for judgment of Judicial Registrar Millane.

Associate:                 
Dated:  3 June 1997

Solicitors for the Applicant:  McCluskys
Counsel for the Applicant:            Mr W. Swain

Representative for the Respondent:       Victorian Employers Chamber of   Commerce & Industry
Appearing for the Respondent:                Mr R. Marasco

Date of hearing:  28 and 29 April 1997
Date of judgment:  3 June 1997