Linsen v Apollo Bay Supermarket
[1997] IRCA 2
•03 January 1997
DECISION NO:2/97
C A T C H W O R D S
INDUSTRIAL LAW - termination of employment - misconduct - unauthorised removal of goods - respondent puts allegation to Applicant but relies primarily on police investigation - Respondent honestly believed on reasonable grounds employee guilty of serious misconduct - summary termination justified
Workplace Relations Act 1996 ss.170DB, 170DC, 170DE, 170EA
CASES:
State of Victoria v Commonwealth of Australia (1996) 138 ALR 129
Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 372)
Sangwin v Imogen Pty Ltd (unreported, IRCA, von Doussa J, 8 March 1996)
Bi-Lo Pty Ltd v Hooper (1992) 53 IR 224
Byrne v Australian Airlines Ltd (1995) 131 ALR 422
Lane v Arrowcrest Group Pty Ltd (1990) 27 FCR 427; 99 ALR 45
Kerr v Jaroma Pty Ltd (unreported, Marshall J, 7 October 1996).
Nettlefold v Kym Smoker Pty Ltd (unreported, IRCA, Lee J, 4 October 1996).
LINSEN -v- APOLLO BAY SUPERMARKET
No. VI-1154 of 1996
Before: Judicial Registrar Ryan
Place: Melbourne
Date: 3 January 1997
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI-1154 of 1996
B E T W E E N :
HANS LINSEN
Applicant
AND
GRAEME AND MARIANNE LINTON
trading as APOLLO BAY SUPERMARKET
Respondent
MINUTES OF ORDERS
Judicial Registrar Ryan 3 January 1997
THE COURT ORDERS:
That the Application be 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-1154 of 1996
B E T W E E N :
HANS LINSEN
Applicant
AND
GRAEME AND MARIANNE LINTON
trading as APOLLO BAY SUPERMARKET
Respondent
Before: Judicial Registrar Ryan
Place: Melbourne
Date: 3 January 1997
REASONS FOR JUDGMENT
THE CLAIM
The Applicant, Mr Linsen, claims unlawful termination of employment. He states in his application (S170EA - Form 132) that:
he is 59 years of age
he was employed as a storeman in the Apollo Bay Riteway Licensed Supermarket from 3 December 1993 to 12 January 1996
he was given a written notice of termination which is attached to his application
he was seeking compensation
His counsel, Mr L W Maher, obtained leave to amend the application at the commencement of the hearing so that it became an application for reinstatement and/or compensation.
THE TERMINATION
The notice of termination is dated 12 January 1996 and reads as follows:
“Mr K Linsen
59 Old Coach Road
SKENES CREEK 3233
Mr Linsen,
you are hereby notified of your dismissal due to misconduct as from 5pm, 12.01.96.
G. LINTON
OWNER”
Mr Graeme Linton and Mrs Marianne Linton own and operate the Apollo Bay Supermarket.
Mr Bailey, as Counsel for the Respondents, agreed to lead evidence first given that the Respondents concede that the employment of the Applicant was terminated at their initiative (see Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 372).
The Respondents assert that:
the employment of the Applicant was terminated by Graham Linton on Monday 15 January 1996 on the grounds of serious misconduct
the misconduct was of a kind such that it would be unreasonable to require the employer to continue the employment during the notice period otherwise required under s170DB(2)
a decision to terminate the employment was for a valid reason and described by Counsel for the Respondents as a “decision on the reasonable grounds in all the circumstances that theft had occurred”
the Applicant admitted on 12 January 1996 that he had been involved in the theft of cigarettes from the supermarket in September 1995
the incident about which the Applicant made admissions on 12 January 1996 had been the subject of an investigation in September 1995
the owner, or one of the owners of the licensed supermarket, Mr Graham Linton, had observed the Applicant place a box of Diet Coke in his car at about 4:00 pm on Friday 12 January and had reported his observations and conclusions to the police at the Apollo Bay Police Station.
The Court notes that Mr Linton admitted in evidence that he did not recognise the box as a box of Diet Coke but rather as a brown coloured carton which he assumed was loaded with soft drink because of the way in which the Applicant “dropped the carton” into the boot of his car and because he assumed that the carton had been taken from the heavily laden supermarket station wagon which was parked immediately behind the Applicant’s vehicle. The Court also notes that the police took a carton of Diet Coke from the Applicant’s car and that the Applicant conceded that he put the carton in his car
(vii)the Respondents have a policy which forbids employees taking stock without a cash register dockets or a cash transaction or an invoice for a credit transaction
(viii)the Applicant knew of the policy requiring documentation before the removal of stock and breached the policy on 12 January
THE EXPLANATION
The circumstances and facts leading up to, and immediately after, the alleged breach are not in dispute. Indeed the Applicant in cross-examination admitted that he acted in breach of the policy. His argument seems to be to the effect that his removal of the Coke from the storage shed to his car was no more than a technical breach. He maintains that it had always been his intention to pay for the box of Diet Coke and that he was too busy at that time packing goods on the shelves of the supermarket storeroom and was anxious to finish the packing of the goods before he was due to finish work at 5:00 pm. He described his actions in taking the Coke to his car without paying for it or obtaining an invoice as “using my head to save my feet”. He also implied that his actions were no more a serious breach of policy than the actions of other staff who put goods in their lockers during the day and paid for them or had them invoiced before they left the premises. Of course there are two clear distinctions between that practice, which Mrs Linton agreed occurred, and the conduct of the Applicant. Firstly, he removed the goods from the premises and placed them in his car. He did not store them in his personal locker. Secondly, he did not pay for the goods or have them invoiced before he removed them from the premises.
THE OBSERVATIONS OF MR LINTON
Mr Linton gave evidence, which the Court accepts, that he observed the Applicant placing a carton in his car on the afternoon of 12 January 1996. Mr Linton correctly assumed that the carton contained soft drink and he suspected that the Applicant had neither paid for or raised an invoice for the soft drink. For all Mr Linton knew at that stage, the Applicant may have been acting in compliance with supermarket policy. However, Mr Linton did not believe this to be the case and he sought advice from the police.
THE SEPTEMBER 1995 INCIDENT
Mr Linton deposed that he thought about what he had seen and thought about it in the light of the conclusions he and his wife had reached over four months earlier in September 1995, namely that, at that time, the Applicant had been stealing cigarettes. On the basis of that conclusion in September 1995 Mr Linton had immediately terminated the arrangement whereby the Applicant was engaged to clean the supermarket outside the normal hours of operation. This was a separate arrangement and additional to the Applicant’s employment as a storeman.
Mr and Mrs Linton both gave evidence that as a result of the September 1995 incident they decided to allow the Applicant to continue working as a storeman. Mr Linton indicated that he was prepared to, in effect, give the Applicant another chance and that he did not consider the security risk as great for a storeman working with other staff during trading hours. Mrs Linton put it more pungently. She said in evidence:
“we thought he had learned his lesson....because of his age. I think my husband said
‘think yourself lucky you still have a job’”.
It is clear from the evidence of Mr and Mrs Linton and the Applicant that very little was said when Mr and Mrs Linton confronted the Applicant over their suspicions that he was stealing cigarettes. Indeed, Mrs Linton probably said nothing at all and the evidence of all three participants is that the conversation was short and oblique.
Mr Linton’s version of the conversation is as follows:
“my wife and I came to the conclusion that we had to do something in respect of the Applicant’s cleaning duties. On 27 September I called the Applicant into my office about 5 pm. I asked for the keys of the supermarket.
He said ‘what for?’
I said ‘I think you know Hans’.
He said, ‘no I don’t’.
I said, ‘I think you do. There are certain items missing from the supermarket’.
He said, ‘no...I think you are wrong (or words to that effect)’.
I said, ‘it is my word against yours. I know who is right’.
He gave me the keys and I said, ‘I am very disappointed in what has happened...at least that is what I think I said.”
The relevant part of Mrs Linton’s evidence was as follows:
“A meeting took place. He came into the office and that is when we dismissed him (from his cleaning job).
My husband said, ‘I think you know why but your cleaning job is finished’.
He (the Applicant) said, ‘you have got it wrong’....but I am not sure of the exact words he used.”
The Applicant’s evidence on this incident is as follows:
“I have taken cigarettes but always recorded it on a docket. Consequently, usually at the end of the week I paid for the docket.
Mr Linton did not identify the stock missing. I told him I knew nothing about missing stock. It is possible that I said, ‘you are wrong about that’. Nothing was said about my work as a storeman.
I said, ‘what is missing?’
Mr Linton said, ‘you know’.
I said, ‘I do not know’...and that was the end of it.
At that time I was working one hour a day on cleaning. I did not contest the termination of the cleaning job as I was in fear of losing the storeman job. I did not say anything about that to Mr and Mrs Linton.”
On all three versions of the September 1995 incident the Court does not find it surprising that Mr Linton chose to report his observations in Pascoe Street on 12 January 1996 to the police rather than confront the Applicant. The Court has observed Mr Linton during the three day hearing and particularly during a lengthy period in the witness box. The Court accepts that suddenly faced with the real possibility that the Applicant was at least breaching the policy in removal of goods, if not stealing property, he chose to seek advice from the police. Mr Linton sought assistance and advice from the police in the context of an employee who had had his other cleaning duties terminated in September 1995 on the grounds of theft. It is quite clear that Mr Linton assumed that the Applicant had stolen a carton of what he assumed was soft drink. It is equally clear that Mr Linton, at this stage, had no way of knowing whether the Applicant had paid for the soft drink or had had it invoiced to him.
The Court has also concluded that the police investigation at the supermarket and the interview with the police at the police station and advice to Mr Linton by the police were crucial factors in the decision which Mr Linton made, probably on Saturday 13 January, to terminate the Applicant’s employment as a storeman.
It is possible that Mr Linton had made up his mind late on 12 January to end the employment but it does not much matter. He communicated his decision by letter dated 12 January when the Applicant arrived at work with a friend, Mr Smith, on Monday 15 January. The letter stated that the termination was effective from 5.00 pm on 12 January although Mr Linton appears to have paid the Applicant for three hours work on Monday 15 January. The termination of the employment occurred on 15 January 1996. It was a summary termination initiated by the Respondent without notice or compensation in lieu of notice.
THE APPLICANT’S POSITION
At the conclusion of the hearing Counsel for the Applicant categorised the termination of employment as unlawful on the basis that:
the employer had failed to establish that there was a valid reason for the termination under s170DE(1)
the employer had not provided a period of notice or compensation instead of notice which, it was asserted, was necessary under s170DB(2)
the employer had failed to give the Applicant an opportunity to defend himself against allegations of misconduct as required by s170DC(a)
the termination was harsh, unjust and unreasonable and in breach of s170DE(2)
On 31 October the Applicant’s solicitor submitted a brief supplementary submission prepared by counsel which reads as follows:
The High Court’s decision Victoria v Commonwealth, (1996) 138 ALR 129 invalidating s170DE(2) of the Industrial Relations Act 1988 should not be taken to weaken the Applicant’s case.
In accordance with decisions of judges of this Honourable Court delivered since the decision in Victoria v Commonwealth, the term “valid reason” in s170DE(1) of the Act is to be taken as requiring the employer to demonstrate that the disputed termination was justified on independent objective analysis.
Kerr v Jaroma Pty Ltd (unreported, Marshall J, 7 October 1996); Nettlefold v Kym Smoker Pty Ltd (unreported, Lee J, 4 October 1996).
It is submitted that for the reasons advanced in the Applicant’s oral submissions, the Respondent has failed to establish that, within the meaning of s170DE(1) as properly interpreted, there was a valid reason for the termination of the Applicant’s employment.”
In essence Counsel for the Applicant submits that:
the Respondents did not investigate the alleged misconduct of the Applicant in removing the Diet Coke from the store without paying for it or without raising an invoice and placing the goods on account
the Respondents were not entitled to rely on the police investigation of that incident
the Respondents were not entitled to rely on the police investigation on 12 January 1996 of the unauthorised removal from the supermarket by the Applicant in September 1995 of cigarettes and other goods
there was an innocent and reasonable explanation for the Applicant’s removal of the Diet Coke
the Respondents as employer did not give the Applicant as employee an opportunity to defend himself against the allegations of misconduct
the removal of the Diet Coke in breach of the policy of payment or invoice did not constitute misconduct such as justified termination of the Applicant’s employment with or without notice
(vii)the removal of the Diet Coke in breach of the policy of payment or invoice did not constitute misconduct of a kind such that it would be unreasonable to require the employer to continue the employment during the notice period
(viii)the removal of the Diet Coke in breach of the policy of payment or invoice did not constitute misconduct so serious as to put the Respondents as employer in a position in which the Respondents could reasonably deny the Applicant as employee an opportunity to defend himself against the allegations of misconduct
THE RESPONDENTS’ POSITION
Counsel for the Respondents asserts that:
there was a valid reason for the termination being the misconduct of the Applicant
the misconduct of the Applicant was the unauthorised removal of the Diet Coke in breach of the policy of payment or invoice
the Applicant conceded that
(a)he had breached the policy requiring payment for, or invoice of goods
(b)he was familiar with the policy
(c)Mrs Linton has warned him “a few times” about the need to comply with the policy
in the context of a supermarket, theft or reasonable suspicion of theft warranted the summary termination of an employee
in the context of a supermarket breach of the policy of payment for or invoice of goods warranted summary termination
Mr Linton was briefly present with Senior Constable Clayton and Constable Van Kempen in the supermarket on 12 January and specifically put to the Applicant the allegation that he had observed the Applicant place a carton in the boot of his private vehicle and that the Applicant had not paid for the carton or had the goods invoiced to him
Mr and Mrs Linton were entitled to rely on the advice provided to them by the police following the police interviews with the Applicant on 12 January, the first interview being in the supermarket at about 5.00 pm and the second interview at the Apollo Bay police station between 5.48 pm and 5.50 pm and between 6.17 pm and 6.33 pm
Counsel for the Respondent pointed out that the following facts were not in dispute:
the Applicant knew the policy on payment or invoice
the Applicant had been warned by Mrs Linton about breaches of the policy
the Applicant conceded he had breached the policy
the Applicant had breached the policy at the rear of the supermarket in circumstances where he could expect not to be observed
the Applicant had failed to pay for the Diet Coke or record his purchase of it and he knew how to pay or record the purchase and had had the time to pay or record the purchase
Counsel for the Respondents placed some reliance on the following:
Sangwin v Imogen Pty Ltd (unreported, IRCA, von Doussa J, 8 March 1996)
Bi-Lo Pty Ltd v Hooper (1992) 53 IR 224
Byrne v Australian Airlines Ltd (1995) 131 ALR 422
Lane v Arrowcrest Group Pty Ltd (1990) 27 FCR 427; 99 ALR 45
FINDINGS
In Sangwin von Doussa J stated:
“Where the dismissal is based upon the alleged misconduct of the employee the employer will satisfy the evidentiary onus which is cast upon it if it demonstrates that insofar as it was within its power before dismissing the employee it conducted as full and extensive investigation into all of the relevant matters surrounding the alleged misconduct as was reasonable in the circumstances, it gave the employee every reasonable opportunity and sufficient time to answer all allegations and respond thereto and that having done those things the employer honestly and genuinely believed and had reasonable grounds for believing on the information available at that time that the employee was guilty of the misconduct alleged and that taking into account any mitigating circumstances either associated with the misconduct or the employee's record such misconduct justified dismissal.”
The test is one of honest belief of serious misconduct on reasonable grounds after sufficient inquiry. The test was stated by von Doussa J after analysing the relevant authorities as follows:
“They (the authorities) lead me to the view that Section 170EDA(1) should not be construed so as to exclude from the notion of a valid reason an honest belief held on reasonable grounds by the employer after inquiry of the type envisaged in Bi-Lo Pty Limited v Hooper that a state of fact exists which justified termination of employment. In my opinion if the employer honestly believes on reasonable grounds after sufficient inquiry that the employee has been guilty of serious misconduct a valid ground within the meaning of Section 170EDA(1) exists for terminating the employment of the employee.”
In Bi-Lo the Industrial Commission of South Australia in a case of alleged theft from a supermarket held that a dismissal will be procedurally fair if the manner and the process of the dismissal and investigation leading up to it are just and if the employer conducted a detailed investigation and reached a conclusion that on all known facts the employee had committed the theft.
In Byrne at 463 McHugh and Gummow JJ state:
“In Lane v Arrowcrest Group Pty Ltd von Doussa J considered the example of the dismissal of an accountant who held a position of trust where it was discovered after the dismissal that the accountant had been systematically embezzling money from the employer. His Honour said it would be astonishing if the employer could not resist an allegation that the dismissal was harsh, unjust or unreasonable, within the meaning of the relevant award, by pointing to those facts discovered after the dismissal, so long as they concerned circumstances in existence when the decision was made. His Honour concluded:
Whether the decision can be so justified will depend on all the circumstances. A circumstance, likely to favour the decision to dismiss, would be that fraud or dishonesty of the employee had caused or contributed to the employer’s state of ignorance. A circumstance likely to weigh against the decision would be that the employer had failed to make reasonable inquiries which would have brought existing facts to its knowledge before the dismissal occurred.”
In my view, for the reasons already given, Mr Linton had made reasonable inquiries. In the circumstances of this case, for the reasons already given, I find nothing unreasonable in Mr Linton calling on the police for advice and investigation and relying on the advice given to him by the police.
Mr Linton was present, albeit briefly, at the supermarket about 5.00 pm and, in the presence of two police officers, specifically alleged to the Applicant that the Applicant had removed goods from the supermarket without paying for those goods and without invoicing the goods so that they could be paid for by way of the Applicant’s personal account. I have no doubt that the employment of the Applicant was terminated by the Respondents for a valid reason connected with the Applicant’s conduct and that this was a sound, defensible, well founded reason within the terms outlined in Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371.
I have no doubt that Mr Linton honestly believed on reasonable grounds after sufficient inquiry that the Applicant had been guilty of serious misconduct on 12 January by removing a carton of Diet Coke from the supermarket store and placing it in the boot of his car and by doing this without paying for the goods or raising an invoice.
I have no doubt the termination was for a valid reason defensible and/or justifiable on any objective analysis of the facts and in the sense in which such analysis has been outlined in Kerr v Jaroma Pty Ltd (unreported, Marshall J, 7 October 1996).
I do not consider the termination unjust or unfair in the sense that I apprehend those words to have been used by Lee J in the unreported decision of Nettlefold v Kym Smoker Pty Ltd (4 October 1996). I consider that the Applicant was given ample opportunity to defend himself against the allegation of unauthorised removal of supermarket goods.
In the circumstances I have reached the conclusion that the application must be dismissed. In reaching the conclusion that the Applicant was terminated by the Respondents for valid reason I have also taken into account the credibility of the Applicant and the credibility of the four Respondent witnesses (Mr and Mrs Linsen, Senior Constable Clayton and Constable Van Kempen). The following reflected adversely on the credibility of the Applicant
the allegations that employees took fruit (especially cherries and grapes) - an allegation not put to Mr or Mrs Linton
the allegation that staff were allowed to take drinks from supermarket stock - later amended to a can of drink or a cup of tea at morning tea or lunch - another allegation not put to Mr or Mrs Linton
the allegation that the cigarettes admittedly taken in September 1995 were included in an invoice - another allegation not put to Mr or Mrs Linton
the allegation that Mr Linton did not like staff to stay back after 5.00 pm and that this was one reason why the Applicant could not have waited until after 5.00 pm to remove the Diet Coke from the premises - again the allegation about Mr Linton’s dislike of staff remaining on the premises after 5.00 pm was not put to Mr Linton
MINUTES OF ORDERS
THE COURT ORDERS:
That the Application be 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 10 pages are a true copy of the reasons for judgment of Judicial Registrar Ryan.
Associate:
Dated: 3 January 1997
Solicitors for the Applicant: B Lester Oldham
Counsel for the Applicant: Mr L Maher
Solicitors for the Respondent: Corrs Chambers Westgarth
Counsel for the Respondent: Mr J Bailey
Date of hearing: 18 and 19 July 1996 (Geelong)
9 August 1996 (Melbourne)
Additional submission by Applicant, 31 October 1996
Date of judgment: 3 January 1997
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