Mr Evan Westlake v Illawarra Coal Holdings Pty Ltd

[2020] FWC 2504

[2020] FWC 2504

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr Evan Westlake
v
Illawarra Coal Holdings Pty Ltd
(U2020/619)

COMMISSIONER RIORDAN SYDNEY, 16 JUNE 2020

Application for an unfair dismissal remedy.

[1] Mr Evan Westlake (the Applicant) has applied for an unfair dismissal remedy in accordance with section 394 of the Fair Work Act 2009, (the Act), following his termination from Illawarra Coal Holdings Pty Ltd (the Respondent) on 31 December 2019.

[2] Leave was granted for the Applicant to be represented by Ms Larissa Andelman, of Counsel and Ms Deborah Langton of Carter Ferguson Solicitors. Leave was also granted to allow the Respondent to be represented Mr Dilan Mahendra of Counsel and Ms Sophie Beaman of Herbert Smith Freehills.

Background

[3] The Applicant was employed by the Respondent at their Dendrobium Mine (the Mine) since January 2005. At the time of his termination, the Applicant occupied the position of Undermanager. An Undermanager is a senior employee at the Mine with a significant degree of autonomy and responsibility. To make a relevant non-coal industry comparison, an Undermanager is equivalent to a Foreman or Supervisor, whilst a Deputy is similar to a Leading Hand or Team Leader. The Undermanager is the most senior employee on a daily basis working underground. The Undermanager is responsible for the operation and safety of the coal cutting process.

[4] The Applicant’s classification is covered by the Black Coal Mining Industry Award 2010 (the Award). The Applicant’s contract of employment entitled the Applicant to be paid a generous salary, participate in the Respondent’s Incentive Plan and to be paid for additional hours in accordance with the Respondent’s Staff and Additional Hours and Public Hoilidays Procedure (the Procedure).

[5] Clause 4.1 of the Procedure provides:

“Staff Employee who work additional hours that are not already included in their remuneration package may be eligible to receive payment for additional hours worked, if prescribed within their Letter of Offer by their Supervisor.

Approval for additional hours can only occur if the hours worked are over four (4) hours in total. These hours must be worked within a single continuous period not an accumulation of sperate periods of additional hours.” 1

[6] Clause 4.1.1 of the Procedure provides:

“The following table determine what an employee is eligible to receive for working additional hours. This table applies to additional hours worked on and from 1 July 2012” 2

Hours Worked	Shift Payment
Less than 4 Hours	No Payment
Greater than or equal to 4 hours and less than 6 hours	0.5 Shifts
Greater than or equal to 6 hours and less than 8 hours	1.0 Shifts
Greater than or equal to 8 hours and less than 10 hours	1.25 Shifts
Greater than or equal to 10 hours	1.5 Shifts

[7] The Applicant’s normal working week was four ten-hour weekday shifts. The Applicant regularly worked overtime as either an Undermanager or a Deputy on weekends. Typically, Undermanager overtime shifts would be of 13 hours in duration, whilst the length of the Deputy overtime shifts would be dependent on the task performed. The Applicant was entitled to compensation for all overtime in accordance with the provisions of the Procedure.

[8] When an employee of the Respondent works overtime, they complete a Staff Additional Payment form (SAP). The SAP form captures the date of the shift as well as its start and end time. Further, employees indicate the payment that they are claiming for the time they worked.

[9] In 2018, the Respondent introduced the Pegasus system (Pegasus). Pegasus was introduced to provide the Respondent with greater accuracy of who was at the Mine. Employees have a swipe card which they use to swipe in and out of the mine site at the carpark.

[10] The Applicant was summarily dismissed for alleged serious misconduct in claiming and receiving payment for overtime that he did not work. It is the Respondent’s contention that from time to time the Applicant has claimed payment for overtime that is inconsistent with his Pegasus data. Relevantly, the Applicant admitted that he claimed these payments in breach of the Procedure.

[11] The Applicant’s letter of termination stated:

“Dear Evan

Termination of your employment

The purpose of this letter is to notify you of the decision to terminate your employment with Illawarra Coal Holdings Pty Ltd (the Company).

As you know, on 12 and 17 December 2019, you attended meetings with Scott Dennis (Manager Mining Engineering) and Catherine Fulton (HR Business Partner) regarding instances where you had claimed and received payment for overtime hours not actually worked by you on 4 October 2019, 25 October 2019, 15 November 2019, 30 November 2019 and 7 December 2019.

You admitted the conduct but claimed that you did so as part of a practice created by you and not approved by the Company, to “even out” the occasions where you worked overtime in excess of the maximum claimable hours under the Staff Additional Hours and Public Holidays Procedure (Overtime Procedure). In addition to the specific dates put to you, you indicated that this was a practice that you had engaged in for some time.

On 23 December 2019, you attended a meeting with Katie Grant (HR Lead) and me, where you were notified that the Company was considering terminating your employment due to your misconduct. You were invited to provide a response to the proposed disciplinary outcome by 5pm on 30 December 2019.

In that same meeting, you provided the Company with a written response dated 23 December 2019. You have since provided a further written response dated 27 December 2019.

The Company has carefully considered the matters raised by you in your response to the allegations and the proposed disciplinary outcome in respect of your conduct.

Having considered all the relevant circumstances, the Company has made the decision to terminate your employment for misconduct in claiming and receiving payment for overtime hours not actually worked by you.

Although, you claim that you were only “balancing your hours” and that you had “hours owing to you”, the Company does not accept this to be the case. Nor does it accept that there is a reasonable basis on which you could consider that this is appropriate conduct having regard to the Overtime Procedure and the terms of your employment.

In addition, you are aware that the appropriate process, as set out in your terms of employment, is to notify your leader of additional hours worked that you feel are not compensated by your remuneration, so that the circumstances can be considered. Instead, you chose to claim payment for overtime hours that you did not work with the intent to receive payment to which you were not entitled. The Company views this as conduct as deliberate and dishonest.

In determining an appropriate disciplinary outcome, alternatives to dismissal were considered by the Company. However, given the seniority of your role, the serious nature of the misconduct, and the level of trust required of you as a senior leader and statutory official, the Company considers that your conduct is inconsistent with the continuation of your employment.

Your employment will end immediately with your final day being today, 31 December 2019. Considering your period of service, the Company has decided to terminate your employment with payment in lieu of notice. This payment will be made despite the view that your actions constitute serious misconduct justifying summary dismissal.

You will receive payment in lieu of 5 weeks’ notice, all accrued and unused leave entitlements for which you are eligible, and any outstanding pay, up to and including your last day of employment.

You are required to return all Company property in your possession to Scott Dennis (including all access cards, keys and uniform) and complete the appropriate Company termination forms by 02 January 2019.

Please note that you may also need to notify your Superannuation Fund and Novated Lease provider that your employment with the Company has ended.

Ongoing Access to Illawarra Metallurgical Coal’s Employee Assistance Program

I understand this is a difficult time for you. The Company wishes to provide you with support via our Employee Assistance Program for a period of up to 3 months following your termination date.

As you are aware, this is a free, confidential, counselling service which can be contacted on 1300 360 364. If you have any questions regarding this correspondence, please contact me or Katie Grant”  3

(My emphasis)

The Applicant’s Submissions

[12] The Applicant submitted that he was at all times honest in the way that he worked, claimed and recorded overtime. The Applicant submitted that he claimed overtime on the basis of ‘evening out’ the actual overtime hours he worked and the overtime for which he was paid. For example, from time to time, when the Applicant worked a 13-hour shift on the weekend, he would add additional time to the end of another overtime shift, to account for the 3 hours of overtime that he had worked previously for which he was not paid. The additional overtime claimed would result in the Applicant being paid a higher overtime band than he had actually worked.

[13] The Applicant submitted that the ‘evening out’ of overtime hours worked and paid was consistent with the custom and practice of Undermanagers and Deputies who worked weekends at the Mine. The Applicant submitted that overtime is managed using SAP timesheets and that the introduction of the Pegaus system, in 2019, did not impact on the custom of ‘evening out’ overtime hours.

[14] The Applicant contended that to deal with the different way in which the Procedure was to operate at each of the Respondent’s sites, the Mine Site General Managers were given discretion as to how to establish policies and procedures to pay overtime under the Procedure.

[15] The Applicant contended that, prior to his termination, the Respondent had never informed him that the practice of ‘evening out’ breached the Procedure.

The Respondent’s Submissions

[16] The Respondent submitted that the Applicant was eligible to be compensated for overtime hours that he worked. The Respondent contended that the rate at which the Applicant was to be paid for this overtime was to be governed by the Applicant’s contract of employment which incorporates the Procedure.

[17] The Respondent submitted that in late 2019, a comparison was undertaken between the overtime hours the Applicant claimed on his SAP timesheets and the Applicant’s Pegasus data. The Respondent submitted that based on this comparison, they had identified that on 10 August 2019, 4 October 2019, 25 October 2019, 15 November 2019, 30 November 2019 and 7 December 2019, the Applicant had claimed additional overtime that he had not worked. The Respondent stated that on each of these days the Applicant rounded up his hours in order to claim a higher overtime band than he was eligible to receive under the Procedure.

[18] The Respondent submitted that on 12 December 2019, the Applicant was invited to attend a meeting with Mr Scott Dennis, Manager Mining Engineering and Ms Catherine Fulton, Human Resource Business Partner, to discuss his claim for payment for work on 30 November 2019. The Respondent submitted that, at this meeting, the Applicant admitted to rounding up his time and stated that if the Respondent were to conduct a further audit of the last three months of SAP and Pegasus records, they would likely find further instances where he had rounded up his overtime.

[19] The Respondent submitted that on 17 December 2019, the Applicant was invited to attend a further meeting with Mr Dennis and Ms Fulton. At this meeting the Applicant confirmed that he had rounded up his overtime on 10 August 2019, 4 October 2019, 25 October 2019, 15 November 2019, and 7 December 2019. The Respondent contended that the Applicant justified his action by stating that he was operating under a ‘give and take’ system and that he was evening out the overtime that he was paid compared to the overtime that he worked.

[20] The Respondent denied that there is a practice or understanding for employees to round up their overtime under any circumstances. The Respondent further submitted that the Applicant was aware that his practice of ‘evening out’ his overtime breached the Procedure.

[21] The Respondent claimed that the breach of the Procedure by a senior employee was a fundamental breach of trust and could only be described as serious misconduct.

A Brief Summary of the Evidence of Evan Westlake

[22] The Applicant claimed that his contract of employment provides for a grievance procedure, which outlines how disputes between himself and the Respondent should be dealt with and that this procedure had not been followed. Further, the Applicant provided evidence that he was advised, by Mr Dennis, before the meeting of 12 December 2020, that he was not going to lose his job as a result of the meeting.

[23] The Applicant stated that the Procedure allows for the payment of overtime in 2-hour brackets, commencing at 4 hours, with the highest bracket being for 10 or more hours. The Applicant claimed that as a result of this payment table, from time to time employees are paid for less hours than they work. The Applicant stated that he was aware of other employees who had adopted the same practice and understanding of the Procedure.

[24] The Applicant claims that he was approached by Mr McAlary to have a discussion in relation to the insertion of appropriate wording into his response to the show cause letter to assist in quashing the current allegations. The Applicant claims that this phone call took place on 21 December 2019.

[25] The Applicant claimed that he did not believe that Pegasus was an accurate method of recording the amount of time an employee worked. Further, the Applicant stated that there were several accepted practices at the Respondent that would result in discrepancies between the SAP timesheets and the Pegasus data, namely:

•  The Applicant claimed that ‘job and knock’ was common practice at the Respondent. ‘Job and knock’ is a colloquial term for the practice of when employees finish the job quickly and end their shift earlier than the time they have been approved to work. It was the Applicant’s evidence that he believed this to be accepted practice at the Respondent.

•  The Applicant stated that, from time to time, employees did not take their crib breaks and simply added the allocated time for these breaks on to the back of their shifts.

A Brief Summary of the Evidence of Rodney Parkinson

[26] Mr Rodney Parkinson is a Mining Supervisor and an APESMA representative at the Mine. Mr Parkinson appeared at the Hearing in response to an Order to Appear issued at the request of the Applicant.

[27] It was Mr Parkinson’s evidence that he was aware of other employees who have previously rounded up their overtime hours to be paid in line with a higher bracket of the Procedure. During cross-examination, Mr Parkinson stated that this practice changed when Pegasus was introduced and that people generally knew that it was the wrong thing to do. Further, Mr Parkinson stated that he no longer believed it to be an accepted practice at the Mine.

[28] Mr Parkinson stated that ‘job and knock’ was used at the mine until late 2019 when employees became aware that Pegasus data was being used to cross check employees. During cross-examination, Mr Parkinson stated that it was his understanding that this practice changed because employees understood that it was inconsistent with the Respondent’s policies. Mr Parkinson acknowledged that this practice was the;

“wrong thing to do.” 4

[29] Mr Parkinson also provided that, in a conversation with the Applicant on 28 or 29 December 2019, he said words to the effect of:

“Everyone has rounded up at some stage” 5

[30] Mr Parkinson stated that he was unaware of any other Deputies or Undermanagers who have been disciplined as a result of ‘job and knock’.

A Brief Summary of the Evidence of Anthony Szabo

[31] Mr Anthony Szabo is an Undermanager at the Mine. Mr Szabo appeared at the hearing in response to an Order to Appear issued at the request of the Applicant.

[32] It was Mr Szabo’s evidence that ‘job and knock’ has not occurred at the Mine since the practice was stopped a few years ago by a previous General Manager of the Mine. Mr Szabo claimed that he does not round up overtime hours on his SAP timesheet. Mr Szabo stated that at some time before the introduction of Pegasus, employees would round up their overtime hours but only when they had not worked the minimum 4 hours in order to be compensated under the Procedure. Mr Szabo claimed that he was unaware of any culture or practice to round up overtime hours since the direction from the previous General Manager.

A Brief Summary of the Evidence of Scott Dennis

[33] At the time Mr Dennis gave evidence he was the Mining Engineering Manager of the Mine and the Applicant’s direct supervisor.

[34] Mr Dennis stated that the Procedure applies where a salaried employee works additional hours over their normal hours of work.

[35] Mr Dennis claimed that he was not aware:

•  of any current or previous custom or practice where overtime hours were rounded up so that an employee would qualify for additional payment.

•  that the Procedure was applied differently at other mines owned by the Respondent.

•  that ‘job and knock’ was currently an accepted practice at the Mine.

[36] Mr Dennis acknowledged that when he called the Applicant and asked him to participate in the meeting of 12 December 2019, he had expressed the view that he did not believe that the Applicant would lose his job. Mr Dennis claimed that at the time he expressed this opinion he was unaware that there were further instances that the Applicant had claimed payment for overtime inconsistent with the Procedure.

[37] Mr Dennis denied that it was accepted practice for Undermanagers and Deputies, who choose to work through their crib breaks, to add this time to the end of their shift when completing their SAP time sheet.

A Brief Summary of the Evidence of Katherine Grant

[38] Ms Katherine Grant is the Human Resources Manager of the Respondent.

[39] It was Ms Grant’s evidence that the Procedure applies;

•  where a salaried employee works additional hours over their normal hours of work; and

•  the additional hours have been preapproved by the employee’s supervisor before they are worked; and

•  the additional hours worked exceed 4 hours.

[40] Ms Grant accepted that the Applicant was not given an opportunity to correct his behaviour. Ms Grant stated that the Applicant was paid his notice, despite being terminated for serious misconduct, as a way for the Respondent to recognise his service. Ms Grant advised that the Respondent decided not to contact the Police in this instance.

[41] Ms Grant claimed that she had no knowledge of any different process or arrangement, outside of the Procedure, that has been accepted at the Mine for the payment for additional hours worked.

A Brief Summary of the Evidence of Neville McAlary

[42] Mr Neville McAlary is the General Manager of the Mine.

[43] It was Mr McAlary’s evidence that he has not implemented any process for the payment of overtime outside of the Procedure. Further, Mr McAlary stated that he has never permitted any process of ‘rounding hours up and down’ to manage overtime under the Procedure.

[44] Mr McAlary testified that the reason he spoke to the Applicant by telephone on 21 December 2019 was to check on the Applicant’s well-being. Mr McAlary denied talking to the Applicant about his disciplinary process.

[45] Mr McAlary agreed that the reason the Applicant was dismissed was not because of the amount of money that was incorrectly claimed but due to the fact that a senior manager knowingly breached the Respondent’s policy. 6

Statutory Provisions

[46] The relevant sections of the Act relating to an unfair dismissal application are:

396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.

381 Object of this Part

(1) The object of this Part is:

(a) to establish a framework for dealing with unfair dismissal that balances:

(i) the needs of business (including small business); and

(ii) the needs of employees; and

(b) to establish procedures for dealing with unfair dismissal that:

(i) are quick, flexible and informal; and

(ii) address the needs of employers and employees; and

(c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.

(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a “fair go all round” is accorded to both the employer and employee concerned.

Note: The expression “fair go all round” was used by Sheldon J in in re Loty and Holloway v Australian Workers’ Union [1971] AR (NSW) 95.

382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

384 Period of employment

(1) An employee’s period of employment with an employer at a particular time is the period of continuous service the employee has completed with the employer at that time as an employee.

(2) However:

(a) a period of service as a casual employee does not count towards the employee’s period of employment unless:

(i) the employment as a casual employee was on a regular and systematic basis; and

(ii) during the period of service as a casual employee, the employee had a reasonable expectation of continuing employment by the employer on a regular and systematic basis; and

(b) if:

(i) the employee is a transferring employee in relation to a transfer of business from an old employer to a new employer; and

(ii) the old employer and the new employer are not associated entities when the employee becomes employed by the new employer; and

(iii) the new employer informed the employee in writing before the new employment started that a period of service with the old employer would not be recognised; the period of service with the old employer does not count towards the employee’s period of employment with the new employer.

385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

see section 388.

387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person— whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.

[47] Regulation 1.07 of the Fair Work Regulations 2009 (the Regulations) provides the meaning of serious misconduct. Regulation 1.07 states:

1.07  Meaning of serious misconduct

(1) For the definition of serious misconduct in section 12 of the Act, serious misconduct has its ordinary meaning.

(2) For subregulation (1), conduct that is serious misconduct includes both of the following:

(a) wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment;

(b) conduct that causes serious and imminent risk to:

(i) the health or safety of a person; or

(ii) the reputation, viability or profitability of the employer’s business.

(3) For subregulation (1), conduct that is serious misconduct includes each of the following:

(a) the employee, in the course of the employee’s employment, engaging in:

(i) theft; or

(ii) fraud; or

(iii) assault;

(b) the employee being intoxicated at work;

(c) the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.

(4) Subregulation (3) does not apply if the employee is able to show that, in the circumstances, the conduct engaged in by the employee was not conduct that made employment in the period of notice unreasonable.

(5) For paragraph (3)(b), an employee is taken to be intoxicated if the employee’s faculties are, by reason of the employee being under the influence of intoxicating liquor or a drug (except a drug administered by, or taken in accordance with the directions of, a person lawfully authorised to administer the drug), so impaired that the employee is unfit to be entrusted with the employee’s duties or with any duty that the employee may be called upon to perform.

Section 396 – Establishing Jurisdiction

[48] Section 396 of the Act outlines several jurisdictional facts that must be addressed before the Commission turns to an assessment of the merits of a matter. I now turn to address each of these in turn.

Section 396(a) whether the application was made within the period required in subsection 394(2)

[49] Section 394(2) of the Act provides:

(2) The application must be made:

(a) within 21 days after the dismissal took effect; or

(b) within such further period as the FWC allows under subsection (3)

[50] It was agreed between the parties that the Applicant’s dismissal took effect on 31 December 2019. The Applicant filed his Form F2 on 18 January 2020. The Applicant’s application was filed within the 21-day time frame proscribed by section 394(2) of the Act.

Section 396(b) whether the person was protected from unfair dismissal

[51] The Respondent is a national system employer. The Applicant has been employed by the Respondent for a period in excess of 6 months. The Applicant’s employment was covered by the Award. As such the Applicant is protected from unfair dismissal.

Section 396(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code

[52] The Respondent is a large entity with far more than 15 employees; thus, the Small Business Fair Dismissal Code does not apply

Section 396(d) whether the dismissal was a case of genuine redundancy

[53] The Applicant’s letter of termination provides that the reason for dismissal was serious misconduct.

Consideration

[54] When considering whether a termination of an employee was harsh, unjust or unreasonable, the oft-quoted joint judgement of McHugh and Gummow JJ in Byrne v Australian Airlines (Byrne) (1995) 185 CLR 410 is of significance:

“It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.

… 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.”” 7

[55] In analysing Byrne, a Full Bench of the Australian Industrial Relations Commission in Australian Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1 held:

“The above extract is authority for the proposition that a termination of employment may be:

•  unjust, because the employee was not guilty of the misconduct on which the employer acted;

•  unreasonable, because it was decided on inferences which could not reasonably have been drawn from the material before the employer; and/or

•  harsh, because of its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct” 8

Section 387(a) Valid Reason

[56] The meaning of the phrase “valid reasons” has been universally drawn from the judgement of Northrop J in Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371:

“In broad terms, the right is limited to cases where the employer is able to satisfy the Court of a valid reason or valid reasons for terminating the employment connected [2019] FWC 3332 10 with the employee’s capacity or performance or based on the operational requirements of the employer. …

Section 170DE(1) refers to “a valid reason, or valid reasons”, but the Act does not give a meaning to those phrases or the adjective “valid”. A reference to dictionaries shows that the word “valid” has a number of different meanings depending on the context in which it is used. In the Shorter Oxford Dictionary, the relevant meaning given is: “2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value.” In the Macquarie Dictionary the relevant meaning is “sound, just, or well founded; a valid reason”.

In its context in s 170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s 170DE(1). At the same time the reason must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must “be applied in a practical, commonsense way to ensure that” the employer and employee are each treated fairly…” 9

[57] In Rode v Burwood Mitsubishi Print R4471, a Full Bench of the Australian Industrial Relations Commission held:

“… the meaning of s.170CG(3)(a) the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason.” 10

[58] In B, C & D v Australian Postal Corporation t/a Australia Post (Australia Post) [2013] FWCFB 6191, a majority of the Full Bench of the Commission held:

“[35] Subject to that, as indicated by Northrop J in Selvachandran, “valid reason” is assessed from the perspective of the employer and by reference to the acts or omissions that constitute the alleged misconduct on which the employer relied, considered in isolation from the broader context in which they occurred. It is the reason of the employer, assessed from the perspective of the employer, that must be a “valid reason” where “valid” has its ordinary meaning of “sound, defensible or well founded”. As Northrop J noted, the requirement for a valid reason “should not impose a severe barrier to the right of an employer to dismiss an employee.”

[36] A failure to comply with a lawful and reasonable policy is a breach of the fundamental term of the contract of employment that obliges employees to comply with the lawful and reasonable directions of the employer. In this way, a substantial and wilful breach of a policy will often, if not usually, constitute a “valid reason” for dismissal.” 11

[59] Following the obiter in Australia Post and the provisions of Regulation 1.07 (2)(a) of the Regulations, I find that the Respondent had a valid reason to terminate the Applicant for serious misconduct.

Section 387(b) Notified of the reason

[60] It is not in dispute that the Applicant was notified of the reasons for his termination.

Section 387(c) Opportunity to respond

[61] It is not in dispute that the Applicant was provided with an opportunity to respond to the allegations

Section 387(d) Refusal to Support Person

[62] The Applicant was not refused the opportunity to have a support person present during the disciplinary process.

Section 387(e) Warning about unsatisfactory performance

[63] The Applicant has never received a warning in relation to his performance.

Section 387(f) Size of Enterprise – Procedures Followed

[64] The Respondent is a large employer and followed its structural disciplinary process.

Section 387(g) Dedicated HR Management

[65] The Respondent has a dedicated HR team.

Section 387(h) Any other matter

[66] I have taken into account the Applicant understood the Procedure which applied to the payment of overtime for Undermanagers and Deputies. The Procedure has a broadbanded hours scale.

[67] I have taken into account that the Applicant knowingly and deliberately breached the Procedure. The Applicant has admitted that his behaviour was in breach of the Procedure.

[68] I have taken into account the Applicant believed that it was unfair that a full weekend overtime shift for an Undermanager was only paid for 10 hours rather than the 13 hours that he actually worked. As a result, he would add additional time, by rounding up his finish times to his other overtime shifts, to make up for his perceived shortfall.

[69] I have taken into account the Applicant claimed that he also rounded down hours on his overtime forms, however, the Applicant acknowledged that when he ‘rounded down’ it was not to his financial detriment.

[70] I have taken into account the Applicant believed that his approach was in accordance with the ‘give and take’ mentality which existed in the management ranks of the Respondent.

[71] I have taken into account that, despite being terminated for conduct described as wilful misconduct, the Applicant was paid 5 weeks’ notice.

[72] I have taken into account that the Pegasus swipe card system was introduced into the Mine as a safety system to assist in identifying the attendance of employees in the event of a safety incident underground and not as a time keeping system.

[73] I have taken into account that the Applicant was honest and open throughout the investigation, including the provision of data which highlighted the days that he rounded up his timesheets.

[74] I have taken into account that the Applicant was a member of senior management at the Mine, being the most senior manager underground on his shift and would regularly meet with the General Manager of the Mine, Mr McAlary.

[75] I have taken into account that Mr McAlary regards this breach of policy by the Applicant as very serious and that the Applicant’s actions have broken down the necessary trust that is the very fabric of the employer/employee relationship.

[76] I have taken into account that the Applicant regularly volunteered for overtime, i.e. the high level of overtime that was worked by the Applicant was not forced on him by his manager.

[77] I have taken into account that the Applicant appears to have been a model employee, apart from this issue, commencing his employment as an Electrician and working his way up to the role of Undermanager.

[78] I have taken into account that three other employees were identified as also having over claimed their overtime. Following an investigation of these “blue collar” employees, the Respondent identified these instances as ‘one off’ mistakes and issued these employees with an official warning. I am satisfied that the Applicant was not treated disproportionately to these employees.

[79] I have taken into account that the Applicant admitted that, whilst not knowing a specific timeframe, he had been rounding up his overtime for more than a year.

[80] I have taken into account that the Applicant was not given the opportunity to rectify his behaviour, i.e. he wasn’t asked to repay the money, given a final warning and told not to round up his overtime hours again.

[81] I have taken into account the conflicting evidence in relation to the content of the telephone call between Mr McAlary and the Applicant. I am satisfied that either account of what transpired would not alter my finding in this matter.

[82] Section 381 (2) of the Act, requires the Commission to ensure that both parties get a “fair go all round.” The Applicant has argued that he didn’t receive his “fair go” because he was not afforded the opportunity to correct his behaviour. I have taken this into account.

[83] I am aware of the industrial history of the term ‘job and knock’. The phase belongs to a bygone era in the Australian industrial relations landscape where employees who were working overtime for a specific function, for example, the unloading of a ship on the waterfront or a concrete pour in the construction industry, at the conclusion of the task, the employees would simple go home and be paid for their full shift even though their shift had not concluded. I accept that this scenario could also have applied to a statutory inspection in the coal industry. I have taken into account the evidence of Mr Szabo that this practice was stopped by the Respondent a few years ago.

[84] I have taken into account that not all of the dates identified on the Applicant’s termination letter, were dates where the Applicant had breached the Procedure. I note the evidence of Mr McAlary that the determinative issue in terminating the Applicant, was not the amount of money that the Applicant defrauded from the Respondent, but the loss of trust in a senior manager who had deliberately manipulated and breached company policy for his financial benefit.

Conclusion

[85] I have taken into account all of the submissions, witness statements and evidence that has been submitted by the parties. The fact that an issue has not been mention in this decision does not mean that it has not been taken into account.

[86] The Applicant claimed that due to the Respondent’s assertion that his actions amounted to serious misconduct, the principle in Briginshaw v Briginshaw (1938) 60 CLR 336 (Briginshaw) was relevant. In Briginshaw Dixon J of the High Court of Australia stated:

“It is often said that such an issue as fraud must be proved "clearly", " unequivocally", "strictly" or "with certainty". This does not mean that some standard of persuasion is fixed intermediate between the satisfaction beyond reasonable doubt required upon a criminal inquest and the reason- able satisfaction which in a civil issue may, not must, be based on a preponderance of probability. It means that the nature of the issue necessarily affects the process by which reasonable satisfaction is attained. When, in a civil proceeding; a question arises whether a crime has been committed, the standard of persuasion is, according to the better opinion, the same as upon other civil issues. But, consistently with this opinion, weight is given to the presumption of innocence and exactness of proof is expected.” 12

[87] I find that the Briginshaw test has been satisfied. The Applicant has admitted that he ‘rounded up’ his overtime hours in breach of the Procedure. Further, there is no compelling evidence before the Commission that at the relevant time the Applicant’s conduct was even tacitly accepted by the Respondent.

[88] I am not concerned that the Respondent’s investigator did not appear as a witness. The Applicant freely admitted that he knew that he was in breach of the Respondent’s policy. There was no need for the Respondent to re-affirm this evidence.

[89] I accept that the Respondent did not follow, in precise terms, the grievance procedure as outlined in the Applicant’s contract of employment. However, it is not unusual, or in any way prejudicial, for the Respondent to involve a Human Resources Advisor in a matter which includes alleged fraudulent behaviour. I find that the disciplinary process undertaken by the Respondent to be fair and reasonable.

[90] The question to be determined is not whether or not the conduct occurred, but rather whether the conduct was of such gravity to warrant the Applicant’s summary termination.

[91] The Undermanager is the most senior representative of Management working underground. The Undermanager takes responsibility for the safe working of the plant, equipment and the employees working underground. The Undermanager could be responsible for between 30-100 employees and contractors on any particular shift. The Undermanager is a trusted employee, whose skills and integrity are relied upon by the Respondent.

[92] Senior management require that senior managers work in the manner proscribed by the Regulations and Company Policy. For a senior manager to deliberately breach a company policy in order to gain personal financial advantage undermines the level of trust required in the employment relationship at a senior level.

[93] The Applicant could not remember how long he had been rounding up his overtime but claimed that it was for more than a year. The Respondent did not undertake an extensive audit of the Applicant’s timesheets past the first three months because the Applicant admitted to his behaviour. I agree with Mr McAlary’s view that this matter is not about the amount of money involved but the loss of trust with a senior employee who deliberately breached a policy of the Respondent because he thought it was unfair.

[94] I accept that the Applicant thought that the Procedure was unfair. However, the Applicant signed his contract of employment knowing what the policy stipulated. I do not accept that the Applicant was not paid for overtime worked in excessive of 10 hours, it is simply that ‘Greater than or equal to 10 hours’ is the ceiling of the broadbanded pay structure of the Procedure. If the Applicant wanted to change the Procedure, then there were avenues open to the Applicant to mount his argument, such as, the Applicant could have raised the issue directly with Mr McAlary in one of the regular meetings between the two men.

[95] I find that the deliberate actions of the Applicant to manipulate his overtime payments were a fraudulent action which undermines the heart of the employment relationship between an employer and a senior manager and warranted his termination. The loss of trust is real. If the Respondent were to turn a blind eye to the actions of the Applicant in relation to the Procedure, then what other policy would attract the same treatment from the Applicant. An employer must be able to trust a senior manager to act in strict compliance with ALL of its policies and procedures. For this not to occur undermines the efficient and safe operation of the Mine.

[96] For the reasons stated above, I am satisfied that the Applicant received his statutory entitlement to a ‘fair go’ and find that the Applicant was not unfairly dismissed.

[97] The Application is dismissed.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<PR719338>

 1   Statement of Katie Grant signed 17 April 2020 Annexure KG-4.

 2   Statement of Katie Grant signed 17 April 2020 Annexure KG-4.

 3   Statement of Katie Grant signed 17 April 2020 Annexure KG-19.

 4 Transcript of 7 May 2020 [585].

 5 Statement of Rodney Parkinson signed 1 May 2020 [11].

 6  Transcript of 7 May 2020 [1038]–[1039].

 7 (1995) 185 CLR 410, 465-7.

 8 (1998) 84 IR 1, 10.

 9 (1995) 62 IR 371, 372-3.

 10 Print R4471 [19].

 11   [2013] FWCFB 6191 [36]

 12 (1938) 60 CLR 336, 362-362.