Mr Mark Farley v Toll Transport Pty Ltd T/A Toll Liquid Distribution
[2011] FWA 1683
•17 MARCH 2011
[2011] FWA 1683 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Mark Farley
v
Toll Transport Pty Ltd T/A Toll Liquid Distribution
(U2010/12036)
COMMISSIONER STANTON | NEWCASTLE, 17 MARCH 2011 |
Termination of Employment - alleged unfair dismissal.
[1] The applicant in this matter, Mr Mark Farley, seeks relief pursuant to s.394 of the Fair Work Australia Act 2009 (Cth) (the Act) in relation to his dismissal from Toll Transport Pty Limited trading as Toll Liquid Distribution (Toll Transport) on 18 August 2010.
[2] Mr A Metcalfe of counsel appeared for Mr Farley. Mr P Ginters of counsel appeared for Toll Transport.
[3] Mr Farley, aged 55, commenced employment with Toll Transport on 8 March 2004. At the time of his dismissal Mr Farley was employed as a professional single prime mover tanker driver primarily involved in the delivery of CO2 gas.
[4] Vehicles operated by Toll Transport and driven by Mr Farley contained a GPS speed monitoring system that monitors both speed and location. Certain alarm systems are activated where speed exceeds 100kph.
[5] Upon commencing employment with Toll Transport in 2004, Mr Farley received a copy of the Toll Liquid Distribution Professional Drivers and Logistics Guide (the 2004 Drivers’ Guide). He was familiar with the speeding policy set out under Section 2, Policies and Responsibilities of the 2004 Drivers’ Guide:
Speeding
• Obey all speed limits;
• Vehicles are speed limited to 100 km/hr - this is non-negotiable;
• Company speed limit is 100 km/hr.
Speeds in Excess of 105 km/hr
• First Offence - Verbal counsel reinforcing company policy;
• Second Offence - A written warning is issued indicating two further breaches and the employee will be terminated;
• Third Offence - Final written warning indicating to the employee s/he will be terminated if the offence is repeated;
• Fourth Offence - Driver is terminated.
Speeds in Excess of 110 km/hr
• First Offence - Final written warning indicating to the employee s/he will be terminated if the offence is repeated;
• Second Offence - Driver is terminated.
Speeds in Excess of 115 km/hr
Driver is terminated immediately.
[6] Mr Farley’s dismissal follows New South Wales Police radar detection on 9 June 2010 which alleged he was driving his allocated prime mover at a speed 18kph in excess of the posted speed sign limit of 80kph at Black Hill near the end of the F3 Sydney-Newcastle freeway.
[7] Toll Transport contends that at the time of Mr Farley’s speeding infringement, the speeding policy under the “Getting Started with Toll Employee Handbook (the new Handbook) had been implemented in or around 2008 and 2009. That policy states “speeding in excess of 15kph of the speed limit will result in termination of employment, as a first offence”. Dismissal is therefore mandatory for any breach in excess of 15kph:
Speeding
• While driving company vehicles, obey all speed limits at all times; and;
• Vehicles are speed limited to 100 km/hr - this is non-negotiable.
The following table outlines the consequences of exceeding the speed limit in Toll-owned heavy vehicles and other cars:
Exceeding Speed Limit up to 10 km/hr
• First Offence - Verbal counselling to restate company policy;
• Second Offence - Written warning issued stating that two further breaches will result in termination;
• Third Offence - Final written warning stating that the employee will be terminated if the offence is repeated;
• Fourth Offence - Driver is terminated.
Exceeding Speed Limit of between 11 and 15 km/hr
• First Offence - Final written warning stating that the employee will be terminated if the offence is repeated;
• Second Offence - Driver is terminated.
Exceeding Speed Limit above 15 km/hr
Driver is terminated.
[8] Mr Farley was vehement that at the time of the incident on 9 June 2010 he was unaware of the policy relied upon by Toll Transport. Rather, Mr Farley contends the policy in place at the time was the policy in place when he commenced employment in 2004. The sanction of dismissal was mandatory only where the speed exceeded 115kph. The policy contemplates a hierarchy of warnings before dismissal for speeds in excess of 105 and 110kph.
[9] During proceedings, the Tribunal was informed that Mr Farley had made attempts to mitigate his loss and had earned approximately $12,500 over nine weeks between 30 August and 21 November 2010, with some prospect of ongoing work.
Evidence
For the applicant
M Farley (Applicant)
Witness Statement marked Exhibit 1 and his oral evidence starts at PN115 on Transcript
M Gamble (TWU official)
Affidavit marked Exhibit 4 and his oral evidence starts at PN589 on Transcript
P Armstrong (truck driver - TWU delegate - Port Kembla)
Affidavit marked Exhibit 5 and his oral evidence starts at PN770 on Transcript
P Marczan (truck driver & OH&S Representative)
Affidavit marked Exhibit 6 and his oral evidence starts at PN1045 on Transcript
B Lieb (truck driver)
Affidavit marked Exhibit 7 and his oral evidence starts at PN1138 on Transcript
D Boan (truck driver, driver trainer, and consultative committee member)
Affidavit marked Exhibit 9 and his oral evidence starts at PN1338 on Transcript
For the respondent
D Gorman (Operations Manager)
Primary statement marked Exhibit 10 and Supplementary statement marked Exhibit 11 with his oral evidence starting at PN1519 on Transcript
M Scotson (National Manager HR and Compliance)
Witness statement marked Exhibit 12 and her oral evidence starts at PN1732 on Transcript
For the Applicant
Mark Farley
[10] The evidence of Mr Farley was that he had a good driving record, particularly given the fact that he travelled an estimated 120,000 kilometres per year. He acknowledged receipt of a warning letter in 2006 following an incident where a truck rolled away during unloading due to an air leak in the braking system. Following his dismissal his Union organiser, Mr Michael Gamble, handed him a warning letter from Toll Transport concerning an 11 second, 106kph “overspeed” detected by the GPS speed monitoring system in February 2010 whilst travelling downhill near Merriwa. In total he had been ‘booked’ two or three times prior to the incident on 9 June 2010.
[11] Moreover, Mr Farley strongly maintained the 2004 Drivers’ Guide policy concerning speeding was the applicable policy throughout his employment with Toll Transport. He similarly contended that at no time during his employment with Toll Transport had he been informed or instructed that an alternative policy applied. Mr Farley acknowledged the policy was relevant to the safety of both drivers and the public at large.
[12] Mr Farley recalled in evidence the incident occurred at the end of the F3 freeway dual carriageway before the John Renshaw Drive roundabout:
Mr Metcalfe: “Before you get to that roundabout as I understand it the maximum speed limit is 110 kilometres an hour. Is that right?”
Mr Farley: “It is, yes.”
Mr Metcalfe: “When does that end?”
Mr Farley: “There’s an 80 warning sign and then after that there’s an 80 sign, which is an actual 80 sign, and then shortly after that you have got your ripple strips. It’s about 1.8, I think, kilometres from the roundabout or 1.4.”
...
Mr Metcalfe: “You were detected by radar camera?”
Mr Farley: “Yes.”
Mr Metcalfe: “Do you know where you were located or your truck was located when you were detected doing 98?”
Mr Farley: “I was just in the ripple strips.”
Mr Metcalfe: “How far is it between the 80 zone coming in effect to the ripple strips?”
Mr Farley: “It would be half a kilometre, I guess, roughly.”
[13] Mr Farley explained the incident was due to his lack of concentration. As soon as he "hit the ripple strips", he realised that he was travelling in an 80kph speed zone.
[14] On 29 June 2010, all Kooragang Island terminal drivers were provided with the new Handbook. Mr Farley understood he had signed a receipt for the new Handbook and given a copy to Mr David Boan, the driver trainer. It was Mr Farley’s evidence that he did not pay particular attention to the new Handbook because “it was not pointed out to drivers that policies such as the policy on speeding had changed.”
[15] When interviewed by Mr Dean Gorman, a Port Kembla based supervisor on 18 August 2010, Mr Farley was accompanied by Mr Brett Lieb, a fellow driver. During the meeting, Mr Gorman showed Mr Farley page 23 of the new handbook and asked him, “Do you understand this page?” As he had not read the new handbook, Mr Farley replied, “What’s that a final warning?”, to which Mr Gorman subsequently responded, “No, instant dismissal.”
[16] Mr Farley stated that during the meeting with Mr Gorman he was not afforded an opportunity to explain what had occurred on 9 June 2010 nor was he questioned generally concerning his driving record and length of service with Toll Transport.
[17] In cross examination, Mr Farley confirmed his previous speeding offences whilst employed by Toll Transport as follows:
16 July 2005 - Coffs Harbour (stationary speed camera)
19 January 2008 - Nelson Bay (police car)
[18] Mr Farley agreed he had signed off on a job description dated 8 March 2004 where a primary duty was, “Whilst driving the vehicle obey all speed limits and safety zones”. He was also given a copy of the then applicable 2004 Drivers’ Guide. He could not recall whether the 2004 Drivers’ Guide was given to him as part of any formal driver’s induction.
[19] Mr Farley was adamant he did not receive a copy of a letter concerning his February 2010 overspeed incident until Mr Gamble gave him a copy following his dismissal. He said a copy should have formed part of his driving records at the Kooragang Island terminal but it was not there. Mr Farley could not recall Mr Gorman counselling him concerning the incident. However, he agreed Toll Transport “took incidents of speeding seriously” and the issue was raised during tool box meetings.
[20] Mr Farley stated he had not read the section of the 2004 Drivers’ Guide that compelled him to immediately report any driving offence to his supervisor.
[21] Mr Farley was aware the penalty of dismissal applied under the 2004 Drivers’ Guide in relation to speeding in excess of 115kph. He also acknowledged speeding through a school zone above 40kph was a serious matter and a dismissible offence on the grounds that school zones were not “freeway conditions”.
[22] Mr Farley contended the incident warranted discipline but not dismissal. In any event, he could not decisively recall any attempts by Toll Transport in or prior to June 2009 to distribute a new Handbook.
[23] In re-examination, Mr Farley stated he could not recall receiving the updated Handbook prior to 29 June 2010 and nor could he recall a representative of Toll Transport specifically informing him of the new speeding policy. Further, Mr Farley confirmed he only received and was required to sign for the new Handbook on 29 June 2010. Moreover, neither his Union organiser, delegate nor a member of the consultative committee had previously informed him of the speeding policy changes.
[24] Mr Farley confirmed Mr Lieb’s request made during the course of the meeting on 18 August 2010 that he be given the option of voluntary resignation was made without his instructions or prior discussion.
Michael Gamble
[25] Mr Gamble is an official of the Transport Workers’ Union of New South Wales. His written evidence was supportive of the position maintained by Mr Farley that at the time of the speeding incident on 9 June 2010, the “new” Toll Transport speeding policy was not in place at its Kooragang Island terminal site:
I have discussed this matter with the other drivers within the Kooragang site and have found that no driver has been consulted or inducted to the new speeding policy and they have signed a petition stating that the penalty does not conform to the policies of Toll at the time of the incident.
[26] Mr Gamble’s evidence was that the “new” policy had not been discussed with the drivers’ consultative committee and in that regard he noted that according to the 24 June 2009 consultative committee meeting minutes, the following item was noted for action for completion within one month:
Glen Ranford will compile a training slideshow presentation for management to present to drivers relating to the policies contained in the Handbook released in October 2008. It was agreed that without precedent, two warning letters issued in Port Kembla in respect to the speeding policy in the Handbook will be rescinded as induction in the policy was not effectively provided.
[27] Mr Gamble also referred to the minutes of a drivers’ consultative committee meeting convened on 13 May 2010 where an agenda item noted “Tool box for driver’s handbook. Changes in new handbook not explained to drivers” had been the subject of discussion at a meeting held on 15 March 2010.
[28] Mr Gamble was adamant the “new” policy was first distributed to drivers at the Kooragang Island terminal site on 29 June 2010. This viewpoint was promulgated in a series of emails forwarded to Mr Gorman following Mr Farley’s dismissal.
[29] In cross examination Mr Gamble admitted the new policy had been discussed with the Union delegate and the OH&S Committee Chairman, both based in Port Kembla:
They had not distributed it due to the fact that it had not been approved by the consultative committee and there had been no consultation with management ... These two drivers were the only two that had been made aware of it and the rank and file members were not.
[30] Mr Gamble agreed that Toll Transport had sought to distribute a new Handbook to employees from June 2009. In that regard he also agreed the position of the Union was that because there was no consultation with the consultative committee, it did not accept the new policy had been implemented. Mr Gamble was unaware Toll Transport was not required to consult through the consultative committee in relation to the new policy.
Patrick Armstrong
[31] Mr Armstrong is the Union’s Port Kembla delegate. When he commenced with Toll Transport in 2004, he recalled receiving a folder which contained the then prevailing 2004 Drivers’ Guide.
[32] Mr Armstrong contended that Toll Transport had attempted “to distribute an amended policy on speed” within the Port Kembla site. He professed “no direct knowledge of what happened at Newcastle.”
[33] Mr Armstrong recalled Toll Transport had sought to hand out the new Handbook. However, drivers “refused to take it” at the time and they were subsequently handed back to management. Moreover, Mr Armstrong did not believe drivers had time to examine the documents prior to handing them back. However, as the Union delegate, he later took the opportunity to examine the new Handbook, particularly the revised speeding policy. The new policy amounted to workplace change which required, in his view, consultation through the consultative committee.
[34] It was Mr Armstrong’s evidence that drivers were concerned about the process adopted by Toll Transport to introduce the new policy rather then the policy itself. He also confirmed that when he accepted employment with Toll Transport in 2004, he was required to "sign off" and abide by the relevant Toll Group Employee Handbook. However, there was no similar process adopted by Toll Transport when it sought to introduce the new policy in June 2009. Simply put, there was no explanatory letter setting out or explaining the changes sought to the policy on speed.
[35] In cross examination, Mr Armstrong confirmed his statement had been prepared by the Union. However, he maintained the statement set out his version of events.
[36] Mr Armstrong was adamant that Toll Transport’s capacity under the prevailing speeding policy to terminate a driver was restricted to offences in excess of 115kph.
[37] Mr Armstrong accepted it was an inherent part of the job of a Toll Transport driver that he/she obeys speed limits.
Peter Marczan
[38] Mr Marczan’s written evidence in chief was identical to Mr Armstrong’s. In cross examination, Mr Marczan was resolute Toll Transport’s entitlement to dismiss a driver for speeding was restricted to an offence in excess of 115kph. However, he acknowledged Toll Transport would be justified in dismissing a driver for driving say, 56kph in a 40kph school zone.
Brett Lieb
[39] Mr Lieb works out of the Toll Transport Kooragang Island depot. His evidence in chief was identical to Mr Armstrong’s.
[40] It was Mr Lieb’s evidence that copies of the new Handbook were not distributed to drivers employed at the Kooragang Island terminal in June 2009. Rather, drivers only had access to a single copy. However in June 2010, a previous site manager, Mr Remy Kowalski brought copies to the terminal for distribution by the driver trainer, Mr Boan. Mr Lieb’s recollection was that the new Handbooks were “put in a box and we were asked to take a copy of it.” Moreover, he could not recollect whether a management representative had explained the contents of the new Handbook or drawn drivers’ attention to the new speeding policy.
[41] In cross examination, Mr Lieb stated management had the right to dismiss a driver for driving 98kph in an 80kph zone provided they weighed up the facts relevant at the time of the incident. He could not recollect being aware of the new speeding policy from June 2009, nor could he recollect whether drivers had engaged in any general discussion at the time concerning the policy. Further, he could not recall taking a copy of the new Handbook at that time.
David Boan
[42] Mr Boan’s evidence in chief was identical to Mr Armstrong’s. Mr Boan confirmed he was a member of the consultative committee and had attended the meeting on 24 June 2009. He recalled that during that meeting the two management representatives, Mr Glen Ranford and Mr Remy Kowalski, had proposed to take the committee “through the new book and anything that was different... they would sit down and discuss it.” It was agreed at the meeting that a slide show presentation identifying the differences in the two policies would be prepared by Messrs Ranford and Kowalski within a month of the meeting. The proposed slide show for drivers never occurred.
[43] Mr Boan’s evidence was that he did not conduct a training course to educate drivers concerning the new speeding policy on 29 June 2010. A training course attendance sheet had been used by him for the express purpose of recording the fact that drivers had been issued with the new Handbook.
[44] Mr Boan contended that notwithstanding the events of 29 June 2010, he was unaware of the changes to the speeding policy until advised by a fellow driver. As the policy had not been the subject of consideration by the consultative committee “all the boys and myself just threw all the books back in the box.”
[45] In cross examination, Mr Boan contended the only circumstances in which Toll Transport could terminate a driver was for driving in excess of 115kph. He differentiated that viewpoint from what action might follow where a driver is found to have driven through a 40kph school zone at 56kph.
[46] Mr Boan stated that at the time of the speeding incident Mr Farley had only been driving the Mercedes vehicle for two months and had never driven a European truck before. He was never given an induction course concerning the operation of the vehicle.
For the Respondent
Dean Gorman
[47] Mr Gorman is the NSW Operations Manager for Toll Liquid Distribution and is responsible for some 30 employees engaged at Port Kembla and Kooragang Island. He replaced the previous manager, Mr Kowalski.
[48] On or about 12 August 2010, the RTA advised Toll Transport that a vehicle had been detected at a speed of 98kph in an 80kph zone on the F3 freeway at Black Hill. Toll Transport had not been notified of the speeding offence by any employee. However, fleet data records subsequently showed Mr Farley had control of the vehicle at the time.
[49] Mr Gorman subsequently contacted Mr Glen Ranford, National Contract Manager, for guidance on what level of action should be taken. Mr Ranford raised the incident with “HR”. A few days later Mr Ranford replied in the following terms:
You will need to go to Newcastle and have a meeting with Mark about the 3-Strikes Notice. I’ve spoken to HR and we have to follow the company guidelines for speeding. If he doesn’t deny it, then we’ll have to terminate his employment unless there are some extenuating circumstances which should be taken into consideration. It’s important that we stick to the company guidelines.
[50] During a meeting convened on 18 August 2010, Mr Farley admitted to Mr Gorman he had been booked by the police. He did not report the incident “cause I never have in the past”.
[51] Mr Gorman subsequently showed Mr Farley a copy of the new Handbook and referred to the policy where speeding in excess of the speed limit results in instant dismissal. According to Mr Gorman, Mr Farley replied:
What are you telling me? Am I getting a final warning?
Mr Gorman subsequently said:
No, you’re being dismissed as it says in the book.
[52] In cross examination Mr Gorman agreed he was present at the consultative committee meeting convened at Port Kembla on 13 May 2010. He could not recall whether he had raised with his manager Mr Ranford concerns held by drivers that the new Handbook and its policies had not been explained to them.
[53] Mr Gorman stated that following the meeting on 13 May 2010, he received copies of the new Handbook for distribution to drivers. In the case of the Kooragang Island terminal site, the documents were distributed through Mr Boan, driver trainer and supervisor. Mr Boan was directed “to go through them with the drivers and have them sign (off)... stating they obviously understood what’s in it.” Mr Gorman rejected the notion that Mr Boan was told no more than to simply give the new handbooks to the drivers and get them to sign off.
[54] Mr Gorman agreed that in June 2010 he was aware there was a point of contention between the Union delegates and Toll Transport concerning the new speeding policy.
[55] Mr Gorman agreed Toll Transport’s letter of offer for Mr Farley required him to sign off on his job description, the 2004 Drivers' Guide and the letter of offer itself. He agreed the intention was to create a contractual relationship between Toll Transport and Mr Farley.
[56] It was Mr Gorman’s evidence that he gave Mr Farley an opportunity to advise whether there were any extenuating circumstances that should be taken into consideration. He also had regard to Mr Farley’s employment history before making any final determination despite an omission concerning such considerations in his primary statement.
[57] Mr Gorman agreed with the proposition that Mr Farley was dismissed summarily at the direction of Mr Ranford because he had been caught speeding in excess of 15kph. While Mr Gorman claims he did consider Mr Farley’s employment history, he was unaware whether Mr Ranford had taken that employment history into account, other then the speeding incident, before directing him to dismiss Mr Farley.
Marie Scotson
[58] Ms Scotson is the National Manager, HR and Compliance for Toll Liquid Distribution, Toll Fleet and Toll Transitions. She commenced her current position on 1 July 2005.
[59] It was Ms Scotson’s evidence that Mr Farley completed an employee induction on 8 March 2004 and was issued with a copy of the 2004 Drivers’ Guide amongst other policy documents.
[60] Ms Scotson explained she conducted a review of the Employee Handbook, driver manual and speeding policy mid-2008. As a result, a new Employee Handbook was produced and on 31 October 2008, she subsequently sent an email to relevant managers, including Mr Kowalski, instructing them to distribute the new Employee Handbook to employees:
2. Employee Handbook
Please discuss and distribute the handbook to your employees. The new handbook has brought together and refreshed employment information from the old handbook and business policies. Current employees are not required to sign the last page of the new handbook - the reason that the new handbook contains no information that arbitrarily changes their current employment arrangements.
Going forward, the handbook should be issued with the Letter of Offer to the prospective employee to sign the last page of the handbook and return this with the letter of offer and any other relevant sign-offs required.
[61] In cross examination, Ms Scotson disagreed with the proposition that under the speeding policy “there’s no issue of discretion, extenuating circumstances, mitigating factors or anything like that.” In her view, the relevant management representative should “always listen to what the person has to say.” It was her evidence that:
The circumstances of the offence, the driving record generally and the service record generally should all be factors taken into account.
[62] Ms Scotson agreed that an employee’s past performance was a consideration Toll Transport should take account of rather than strictly relying upon the speeding policy to determine whether to dismiss a driver.
[63] Ms Scotson agreed that the intention of the requirement that employees must sign off on the letter of offer, job description and relevant Employee Handbook was to create a contractual relationship where the employee is under no doubt as to the precise terms and conditions of their employment with Toll Transport.
[64] Ms Scotson confirmed that whilst three versions of the Employee Handbook had been prepared and issued since mid 2008, the nature of the speeding policy had remained unaltered. Shortly stated, copies of the first Employee Handbook issued on 1 September 2008 were sent to Managers accompanied by the email directions on 31 October 2008. Ms Scotson was unaware of how and precisely when the Employee Handbooks were given to drivers. Further versions of the Employee Handbook were similarly distributed in March or April 2009 and in 2010 following further corporate name changes.
[65] Ms Scotson admitted the reference in her email dated 31 October 2008 that the new Employee Handbook had “no information that arbitrarily changes” drivers employment arrangements was based on her belief that in addition to the ‘old’ speeding policy set out in the 2004 Drivers’ Guide, dismissal for speeding in excess of 15kph of the relevant speed limit had always applied. In support of that contention, she further stated it was her understanding that this particular policy had been "always applied" prior to 2008 and agreed the policy "would be applied even if they (the drivers) hadn't been advised of that policy". Ms Scotson refused to agree that the 'new' speeding policy represented a change to the employment conditions established when Mr Farley joined Toll Transport in 2004.
[66] Ms Scotson was aware a buzzer is activated when a vehicle exceeds 103kph. She agreed that in the event a professional driver achieved a speed of 115kph that "would be indicative of an intention ... to actually speed". However, she could not distinguish that situation as being different to one of momentary inadvertence where a driver fails to “drop down from 100 to 80 when the speed zone changes from 110 to 80.”
[67] Ms Scotson could not accept that a driver who may have travelled close to 800,000 kilometres over a six year period with one over speed violation and two prior fines for speeding offences less than 15kph over the relevant speed limit represented a "reasonable" driving record.
Submissions
Applicant
[68] Mr Metcalfe stated Mr Farley was dismissed by Mr Gorman at the direction of Mr Ranford for being fined for travelling over 15kph above the 80kph speed limit. Against that backdrop, the Tribunal must determine which speeding policy applied at the time of Mr Farley’s offence on 9 June 2010 and whether the decision to dismiss Mr Farley summarily was relevantly harsh, unjust or unreasonable.
[69] Mr Metcalfe contended the objective seriousness of Mr Farley's conduct could not be determined merely by reference to speed.
[70] Mr Metcalfe submitted the evidence of Mr Gorman and Ms Scotson was supportive of the proposition that Mr Farley’s letter of offer, job description and the 2004 Drivers’ Guide together formed the contractual conditions governing his employment with Toll Transport. Accordingly, the revised speeding policies now set out in the various versions of the Handbook from 2008 onwards have no similar contractual force. However, the speeding policy set out under the 2004 Drivers’ Guide continued to have force.
[71] The process adopted by Toll Transport to introduce a new Handbook and speeding policy was flawed. As there was no offer and acceptance, there was no variation to the contract of employment formed on Mr Farley’s commencement with Toll Transport in 2004. In that regard, Mr Metcalfe referred to the decision of Cowdroy J in Transport Worker’s Union of Australia v K & S Freighters [2010] FCA 1225 at [61] where His Honour considered whether various documents, including an employee handbook, had contractual force with respect to the employment of a particular employee:
61. In Toll (FGCT) Pty Limited v Alphapharm Pty Limited and Others [2004] HCA 52; (2004) 219 CLR 165 at 179 the High Court of Australia said at [40]:
It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction. [Footnotes omitted]
62. The test is accordingly an objective one. The Court is also mindful of the particular conditions and context in which industrial law operates. In this respect the Court notes the observations of Madgwick J in respect of the interpretation of an industrial award in Kucks v CSR Limited (1996) 66 IR 182 at 184 where his Honour stated:
It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind ...
[72] Mr Metcalfe contended Mr Farley was contractually bound and submitted that Toll Transport employees should expect that employer policies, including speeding policies, will apply to them until “appropriate processes are adopted to vary that policy" contractually. In that regard, it was clear that the intention of Mr Farley’s letter of offer was to create a contractual relationship. Mr Farley was required to sign off on his job description and the 2004 Drivers' Guide. He was required to obey all speed limits, safety zones, road transport rules and regulations. The employer's intention was therefore to create a contractual relationship. However, that position did not remove Toll Transport's residual right to terminate a driver "for speeding in circumstances which were objectively dangerous but fell outside the particular (speed) grid ...".
[73] Mr Metcalfe contended the 2004 Drivers' Guide speeding policy was a condition of employment and certain disciplinary measures applied to any breach. The policy stated vehicles were speed limited to 100kph. The Toll Transport speed limit is also 100kph. A hierarchy of disciplinary sanctions applies to speeds in excess of 105kph with summary dismissal for speeding in excess of 115kph because an essential term of the contract has been flouted. Accordingly, given Toll Transport vehicles are speed limited, with warning devices in place, breach of the 2004 Drivers’ Guide speeding policy implies, as was the evidence of Mr Marczan and Mr Boan, a degree of wilfulness on the part of a driver.
[74] Mr Metcalfe referred to the decision in Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 1 WLR 698 CA, where at 701 the Court of Appeal held that although disobedience to a lawful order is misconduct, it may not besufficiently serious to justify summary dismissal:
[an] act of disobedience or misconduct can justify dismissal only if it is of a nature which goes to show (in effect) that the servant is repudiating the contract, or one of its essential conditions; ...
and
... the disobedience must at least have the quality that it is "wilful": it does (in other words) connote a deliberate flouting of the essential contractual conditions.
[75] Mr Metcalfe stated Mr Farley was booked “several hundred metres” into the 80kph zone. Traffic conditions were good. The incident was the result of inadvertence rather than any deliberate or wilful flouting of an essential contractual condition and, in any event, the new Handbook speeding policy had no contractual force with the Kooragang Island terminal drivers:
... the company has sought to rely upon the fact that there was some attempts to distribute it. Those attempts do not appear to have been successful to the extent that people who were line drivers as opposed to delegates or driver trainers were made directly aware of the change in policy, and Mr Farley in particular because it’s his individual contract of employment which matters, was not aware that the company was seeking to introduce the new policy on speeding as it applied to him.
[76] Mr Metcalfe submitted implementation of the Toll Transport 2008 policy was flawed and accordingly, there had been no variation to Mr Farley’s contract of employment and no valid reason for termination. Rather, the sole reason for Mr Farley’s dismissal was a direction from Mr Gorman’s manager, Mr Ranford, following speeding detection and a subsequent fine. There was no examination or consideration of Mr Farley’s driving record of some 800,000 kilometres as suggested by Ms Scotson in evidence. Insofar as the February 2010 incident was concerned, Mr Metcalfe argued Mr Gorman could not accurately recall the events in question. Mr Farley had not countersigned a warning letter alleged to have been given to him shortly thereafter and there was no copy on file at the Kooragang Island terminal. On the balance of probability, counselling as alleged by Toll Transport did not occur.
[77] Mr Metcalfe submitted Mr Farley's conduct warranted a warning letter consistent with the hierarchy of sanctions available under the 2004 Drivers' Guide speeding policy.
Respondent
[78] Mr Ginters submitted Mr Farley was a professional tanker driver engaged in the delivery of dangerous substances such as carbon dioxide. There was no dispute that he had a primary responsibility to obey all speed limits and safety zones. Accordingly, Toll Transport was entitled to take a firm view of the 9 June 2010 speeding incident. A sanction less then dismissal would underplay the seriousness of driving a 22 tonne vehicle 18kph over the speed limit.
[79] Given the stringent occupational health and safety obligations imposed on Toll Transport and its drivers, the company adopts a firm approach to speeding by its drivers.
[80] Mr Ginters claimed Mr Gorman had a clear recollection of the counselling phone call he had with Mr Farley on 16 February 2010 following the 11 second “over speed” breach, where the speed of his vehicle peaked at 106kph.
[81] Mr Ginters submitted Mr Farley claimed he was aware of the 2004 Drivers’ Guide requirements concerning speed limits yet he failed to comply with the requirement to report speeding infringements to his supervisor “immediately”.
[82] In relation to the 9 June 2010 incident, Mr Farley was terminated consistent with Toll Transport’s policy concerning breach of the speed limit by 15kph or more. Mr Ginters relied upon the evidence of Mr Gorman that Mr Farley was afforded an opportunity to respond and provide an explanation for his conduct prior to dismissal. Mr Gorman had also considered Mr Farley’s employment history.
[83] Mr Ginters submitted Mr Farley’s speeding breach effectively demonstrated a repudiation of the contract of employment: Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 1 WLR 698 CA. In the alternative, if the Tribunal is not satisfied the incident warranted summary dismissal, the Act provided a compensatory remedy. However, reinstatement was not an appropriate remedy.
[84] Toll Transport had a valid reason for dismissing Mr Farley - he had exceeded the speed limit and had failed to disclose that breach to the company. His speeding complicated or caused a serious and imminent risk to the health or safety to both himself and other drivers on the road at the time. It was serious misconduct.
[85] There is no obligation under the Site Agreement that requires Toll Transport to consult with employees or conduct appropriate induction concerning variations to the relevant employee or Drivers’ Guide. In that regard, Mr Farley did not deny the attempts made by Toll Transport to distribute the updated new Handbook in 2009.
[86] Mr Ginters submitted this was not a case where Toll Transport’s speeding policy was incorporated into his contract of employment. In the alternative, if the Tribunal was required to determine whether Toll Transport’s “in excess of 15kph policy” as expressed in the new Handbook was incorporated, it would conclude it was an implied term that the Company could update the policies contained in the Employee Handbook, including its speeding policy. Such an implied term would be one that has due regard to the relationship between Toll and its employees, would be reasonable and would not be unfair: Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193 per Mansfield J at [150], [152].
[87] Mr Ginters stated Mr Farley, on his own admission, agreed it would not be unreasonable for Toll Transport to dismiss an employee caught driving in excess of 115kph in a 100kph zone, nor found to be travelling at 55kph in a 40kph school zone.
[88] The 2004 Drivers’ Guide repeats a condition of Toll Transport’s disciplinary rights and does not limit its capacity to dismiss an employee for a speeding infringement other then the circumstances set out in therein.
[89] Mr Farley was notified of the reason for his dismissal, given an opportunity to respond and to have a support person present at the meeting on 18 August 2010. In addition, he had been previously counselled concerning another driving incident on 16 February 2010. Moreover, given the dangerous nature of the work performed by drivers, Toll Transport was entitled to take a firm position in this matter.
[90] Toll Transport opposed reinstatement. However in the event the Tribunal was satisfied an order for reinstatement was appropriate, it would be inappropriate to make an order on account of Mr Farley’s lost remuneration, given the gravity of the conduct that led to his dismissal. Mr Farley has mitigated his loss and post hearing, there was an expectation of ongoing employment albeit on conditions globally less favourable than Toll Transport.
[91] Mr Ginters referred to the recent decision of the Industrial Relations Commission of New South Wales in Sydney Ferries Corporation v The Seamen's Union of Australia, NSW Branch on behalf of Levy [2009] NSWIRComm 126 where the Full Bench held it was inappropriate to make an order for lost remuneration given the circumstances that led to the employee's dismissal:
[91] We would address the Union's cross appeal in the following way. It is a common practice in unfair dismissal cases where an order for reinstatement is made, for orders of back pay (or, more correctly described, lost remuneration), to be tailored according to any identified culpability of the applicant as to the circumstances surrounding his/her dismissal. Thus, in cases where misconduct may be found by the Commission to be proven, but not necessarily justifying dismissal (as is the case here), or in circumstances where a dismissal is found to be too 'harsh' (again, as is the case here), a lesser amount, or no amount at all, may be considered as a 'penalty' for the applicant's conduct. There is nothing inherently wrong in this approach: see Electricity Commission of New South Wales t/as Pacific Power v Crump (1993) 48 IR 296. In the present case, we do not consider it appropriate or just for Mr Levy to receive back pay given his contribution to the circumstances that led to his dismissal.
[92] We consider that the Deputy President's refusal to order back pay constituted an appropriate exercise of the Commission's discretionary powers under s 89 of the Act: See Western Sydney Area Health Service v Gibson [2001] NSWIRComm 290; 109 IR 359 at [12]. Unless an appealable error of the kind discussed in House v The King is able to be identified, then there can be no basis for challenging such a decision on appeal: see Coal & Allied Operations v Australian Industrial Relations Commission [200] HCA 47; 203 CLR 194. We do not consider that Grayson DP made any error in that respect. Moreover, we are of the opinion that his Honour's decision was entirely appropriate in light of his findings of fact and, given all the circumstances, was a just and reasonable outcome.
Consideration and Finding
The statutory requirements
[92] Section 385 of the Act relevantly provides that a person has been unfairly dismissed if the Tribunal is satisfied that the person has been dismissed and the dismissal was harsh, unjust or unreasonable.
Was the Termination of Employment Harsh, Unjust or Unreasonable?
[93] Section 387 requires the Tribunal to consider the following factors when determining whether a particular applicant's dismissal was harsh, unjust or unreasonable:
(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);
(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 FWA considers relevant.
s387(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).
[94] The precise circumstances in which Toll Transport considered Mr Farley’s conduct warranted summary dismissal were conveniently set out at paragraph 9 in an email from Mr Gorman to Mr Gamble dated 25 August 2010 (Ex 4, Annexure C):
a. TLD’s policies provided for termination given the infringement;
b. Mr Farley knew or ought to have known about those policies, and in fact demonstrated his awareness of them at the termination interview;
c. Mr Farley had breached the policies by not reporting the infringement; and
d. Mr Farley had only recently been cautioned about compliance with TLD’s speeding policy.
[95] Mr Farley’s letter of offer dated 4 February 2004 excluded the terms and conditions of the relevant industrial instrument governing his work. A condition of employment was that he was required to abide by the terms and conditions of the 2004 Driver' Guide. It also follows that given Mr Farley’s length of employment, he had reasonable opportunity to comprehend Toll Transport’s driving policies, including the policy related to speeding.
[96] There was no provision in the letter of offer to ensure that agreements and policies applying to Mr Farley's employment from time to time were not incorporated into his contract of employment as a contractual term. In that regard, the evidence supported the proposition that Toll Transport required employees to sign off on their letter of offer, job description and relevant Employee Handbook so as to create a contractual relationship. Notwithstanding the evidence of Mr Gorman and Ms Scotson concerning the intention of Toll Transport to create a contractual relationship with its employees, the company denied the existence of such a relationship.
[97] The parties’ intentions upon entering contractual relations in 2004 must be determined objectively. The test to be applied is what a “reasonable person” would have considered the “contract” to mean: Toll (FGCT) Pty Limited v Alphapharm Pty Limited and Others [2004] HCA 52; (2004) 219 CLR 165 at [40]. The legal principles that apply to a determination as to whether or not a contract has been formed and relevant in part to these proceedings were considered by Mahoney JA in Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2NSWLR 309 at 326:
... did the parties arrive at a consensus?; (if they did) was it such a consensus as was capable of forming a binding contract?; and (if it was) did the parties intend that the consensus at which they arrived should constitute a binding contract?
[98] In consideration of the evidence of both Mr Gorman and Ms Scotson concerning Toll Transport’s intention to create a contractual relationship with Mr Farley, I simply concur with their reasoning. The inference in Ms Scotson's evidence was that a benefit of incorporating policies into contracts of employment was that it enabled Toll Transport to enforce disciplinary procedures against employees where those procedures are contemplated by the particular policy. However, such policies and procedures also bind Toll Transport and in the event a particular policy is not followed, it may itself be in breach of the policy and the contract of employment.
[99] Irrespective of whether Toll Transport formed a contractual relationship with Mr Farley, the process it adopted to introduce a new employee handbook and revised speeding policy during the course of 2008 was flawed. It was misleading for Ms Scotson to advise managers that employers were not required to sign off the new Handbook on the grounds “it contains no information that arbitrarily changes their current employment arrangements". It cannot be said that the new speeding policy was other then a significant policy shift.
[100] Policies cannot be effective unless the employer makes arrangements to provide them to affected employees in an orderly way and carefully explain changes to all existing employees prior to those changes taking place. Employees need to know how to comply and the implications of non compliance. All changes made to policies must be clearly and openly communicated to employees. It follows that where changes are not properly communicated to employees, they may be of no effect.
[101] It is clear on the evidence in these proceedings that Mr Farley was reasonably familiar with the 2004 Drivers’ Guide speeding policy, particularly the implications for exceeding the then speed limit of 100kph.
[102] Moreover, Ms Scotson was not aware of the methods used to distribute the new Handbooks to employees. Mr Gorman understood Mr Boan had explained aspects of the new Handbook, specifically the speeding policy to drivers and had also obtained a written acknowledgement that they had understood the contents. However, Mr Boan’s evidence was that he did not conduct the training course as contended by Mr Gorman. Rather, he simply used a training course attendance sheet on 29 June 2010 to formally record that drivers had been issued with the new Handbook.
[103] The evidence of Mr Farley was that he had signed for a copy of the revised Handbook but did not pay much attention to the contents as drivers had been informed “policies such as the policy on speeding had not changed.”
[104] Notwithstanding handing copies of the revised Handbooks to employees on 29 June 2010, it was also Mr Boan’s evidence that he was not personally aware of the changed speeding policy until subsequently advised by another driver. It was also Mr Boan’s evidence that the consultative arrangements agreed to by Mr Ranford and Mr Kowalski on 24 June 2009 to consider “the differences in the two policies” did not occur. Accordingly, “the boys and myself just threw all the books back in the box". Mr Boan’s evidence is broadly consistent with that of Messrs Gamble, Armstrong, Marczan and Lieb. There was no explanatory induction or similar oral or written communication.
[105] I have considered all the evidence and the submissions of the parties put to the Tribunal in this matter. My finding based on that material is that at the time of Mr Farley's speeding incident on 9 June 2010, it is highly probable that the relevant speeding policy in place was the policy set out in the 2004 Drivers’ Guide. The totality of the evidence concerning Mr Farley's breach of the prevailing 80kph speed limit also points to misconduct that may have endangered his own safety and that of others. That conduct requires sanction as acknowledged by Mr Metcalfe in submissions.
[106] The conduct alleged by Toll Transport must be such that it constitutes a repudiation of the contract of employment by Mr Farley. The onus here rests with Toll Transport to show such a wilful and deliberate intention on the part of Mr Farley which strikes at the very core of the employment relationship. On the evidence in these proceedings, Mr Farley's conduct, when viewed as a whole, did not involve a deliberate or intentional flouting of essential contractual conditions. It was not wilful conduct.
[107] When considering Mr Farley's driving record it cannot be said that it is punctuated by a plethora of wilful breaches of established speed limits. Quite the contrary. However, those breaches whilst also serious, in my view fall largely within the defence Mr Metcalfe has described as inadvertence. Accordingly, there was no valid reason for termination of Mr Farley given all the circumstances of this case. It was of course open to Toll Transport to place Mr Farley on a warning consistent with the gravity of the misconduct that occurred and his requirements under the 2004 letter of offer and the 2004 Drivers' Guide.
s387(b) whether the person was notified of that reason;
[108] Mr Farley was notified of the reason for his dismissal.
s387(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person;
[109] The opportunity to respond is a reference to an opportunity to respond before a decision is taken to terminate the employee’s employment. Mr Farley was provided with an opportunity to respond to the reason for his termination. However, I accept on balance that Mr Farley's response was limited as he was unable to fully articulate his employment history with Toll Transport or the circumstances surrounding the speeding incident.
s387(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;
[110] A support person was present at the meetings convened to discuss the incident.
s387(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal;
[111] I do not accept that Mr Farley was given a formal counselling warning concerning his overspeed incident in February 2010 in the terms contended by Mr Gorman.
s387(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;
[112] I do not consider that the size of the business impacted on the procedures followed in effecting the dismissal.
s387(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
[113] Toll Transport has a full time human resources department. The evidence of Ms Scotson was that Mr Ranford was able to discuss the matter with her.
s387(h) any other matters that FWA considers relevant.
[114] I have had regard to the fact that Mr Farley had been employed from 2004 and the fact that he had driven some 800,000 kms or more over the duration of his employment. Other than the February 2010 overspeed incident and truck unloading issue during 2006 there was no evidence of any performance issues.
Finding
[115] While this case is finely balanced, I have carefully considered all the materials in this matter and determined the termination of Mr Farley’s employment was harsh, unjust and unreasonable.
Remedy for unfair dismissal
[116] Section 390(1) provides that where the Tribunal finds that a dismissal was unfair, reinstatement is the primary remedy with compensation as an alternative. Mr Farley has sought reinstatement in his employment and compensation for lost remuneration. I am satisfied that the reinstatement of Mr Farley is appropriate given the circumstances of this case. I consider it appropriate to make orders pursuant to s.391(1)(a) and s.391(2)(a) for reinstatement and continuity of employment.
[117] Nothing was put in these proceedings to suggest that if reinstatement was the appropriate remedy that I should do anything other than order reinstatement to the position which Mr Farley held immediately before his dismissal.
Order for lost pay
[118] Mr Farley is also seeking an order to restore lost pay. During proceedings, the degree to which Mr Farley had sought to mitigate his loss was broadly canvassed. I am particularly mindful of the submissions advanced on behalf of Toll Transport by Mr Ginters, who submitted that in the event the Tribunal was satisfied an order for reinstatement was appropriate, it would be inappropriate to make an order on account of Mr Farley’s lost remuneration, given the gravity of the conduct that led to his dismissal. I support that approach. I have given consideration to Mr Farley's conduct and determined his reinstatement should not include an order to restore lost pay as provided by s.391(3).
[119] An order reflecting this decision will be published separately in PR507656
COMMISSIONER
Appearances:
For the applicant, Mr A Metcalfe, of counsel for the Transport Workers’ Union of Australia, New South Wales Branch.
For the respondent, Mr P Ginters, of counsel for Toll Transport Pty Limited.
Hearing details:
2010
Newcastle
December 7 & 8
Printed by authority of the Commonwealth Government Printer
<Price code C, PR507655>
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