Mr Michael Kane (U2009/12715Mr Shannon McMillan
[2010] FWA 4858
•12 JULY 2010
[2010] FWA 4858 |
|
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Mr Michael Kane
(U2009/12715
Mr Shannon McMillan(U2009/12713)
vGoodyear and Dunlop Tyres (Australia) Pty Ltd
SENIOR DEPUTY PRESIDENT DRAKE | SYDNEY, 12 JULY 2010 |
Termination of employment.
[1] This application was heard in Wodonga on 3 March 2010 and 9 March 2010. Final submissions were received on 17 March 2010.
[2] Mr Morgan, of Nevin Lenne & Gross solicitors, appeared for both Mr McMillan and Mr Kane. Mr Jacobs of Counsel, instructed by Minter Ellison solicitors, appeared for Goodyear and Dunlop Tyres (Australia) Pty Ltd (Beaurepaire).
[3] Beaurepaire did not comply with the directions issued by the Registry on 24 December 2009. Minter Ellison solicitors were not instructed until the Thursday prior to the hearing, at which time Beaurepaire were already four days late in compliance. Minter Ellison urgently prepared various statements and submissions but, as a consequence of their late instructions, could not comply with the directions. Mr Morgan requested that the respondent be confined to cross-examination. I refused that application, predominantly because the terms of the directions did not specify the consequences of non compliance.
[4] For the purpose of considering these applications I am required by the Fair Work Act 2009 (the Act) to consider the criteria set out below.
Section 387
“In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA 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 FWA considers relevant.”
[5] For the purpose of considering remedy, if appropriate, the following sections are the legislative framework:
Section 390
“(1) Subject to subsection (3), FWA may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) FWA is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) FWA may make the order only if the person has made an application under section 394.
(3) FWA must not order the payment of compensation to the person unless:
(a) FWA is satisfied that reinstatement of the person is inappropriate; and
(b) FWA considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.
391 Remedy—reinstatement etc.
Section 391
Reinstatement
(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:
(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or
(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
(1A) If:
(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and
(b) that position, or an equivalent position, is a position with an associated entity of the employer;
the order under subsection (1) may be an order to the associated entity to:
(c) appoint the person to the position in which the person was employed immediately before the dismissal; or
(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
Order to maintain continuity
(2) If FWA makes an order under subsection (1) and considers it appropriate to do so, FWA may also make any order that FWA considers appropriate to maintain the following:
(a) the continuity of the person’s employment;
(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.
Order to restore lost pay
(3) If FWA makes an order under subsection (1) and considers it appropriate to do so, FWA may also make any order that FWA considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.
(4) In determining an amount for the purposes of an order under subsection (3), FWA must take into account:
(a) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for reinstatement; and
(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.
Section 392
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), FWA must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that FWA considers relevant.”
[6] Mr Kane and Mr McMillan had both been employed as tyre fitters by Beaurepaire until their employment was terminated on 1 October 2009.
[7] There had been no warnings to either Mr Kane or Mr McMillan prior to dismissal related to either their conduct or performance. They had never been questioned concerning their performance, attendance, initiative, efficiency or attitude during the course of their employment. 1
[8] On 1 October 2009 Mr Kane and Mr McMillan were fitting a new trailer tyre. Mr Kane removed the existing tyre; repaired the existing tube; accepted, without checking, a new tyre obtained by Mr McMillan; fitted the repaired tube to the new tyre; fitted the new tyre to the wheel; put it into a safety cage and inflated it. It exploded in the safety cage. It exploded because Mr McMillan had obtained and provided the wrong sized tyre to Mr Kane and also, because Mr Kane did not notice.
[9] Mr Kane’s evidence was as follows.
“5. The work I did was as a tyre fitter.
6. When I first started I was given an instruction manual and I learned the job by watching other co-employees do it. When I returned to work for the second time it was accepted that I could do the job.
7. On 1 October 2009 I arrived at work and noticed a trailer with a flat tyre and there was wire visible as the tread.
8. I made enquiries as to what was to happen and I was told that another tyre was to be fitted.
9. I took the wheel off the trailer and removed the old tyre by removing the locking ring. This releases the tyre from the rim.
10. Shannon McMillan, another employee brought to me a retread tyre and I put the repaired tube and the old rust band into it and fitted it back onto the rim. The locking rim was then replaced.
11. When he gave it to me I assumed he had the right tyre. There were two types of tyre in stock very similar in size. The one he gave me had the same pattern as the tyre I had removed and I assumed it was suitable as it had the same pattern.
12. The other tyre available was of a different pattern and it was three quarters of an inch in circumference smaller. The tube and the rust band when fitted gave no indication that I had a wrong size tyre. I put the tyre in the safety cage, attached the air hose and commenced to inflate the tyre.
13. While doing so the tyre came off the rim and the tube split. There was an audible noise. The safety cage had done its job. There was no disintegration of parts as an explosion and no injuries were caused to any one.” 2
[10] Mr McMillan’s evidence was as follows.
“8. On the first October 2009 I was asked to check a trailer tyre on a vehicle owned by the Albury City Council. It was a four wheel trailer and one of the tyres was flat and bald. I went to Adrian (Manager) and told him the tyre was bald and not worth fixing and suggested we go with a new retread.
9. I asked if we would go with a mud pattern or highway pattern.
10. The pattern on the trailer was a mud pattern so that was the one I picked up.
11. In stock they had two tyres of the mud pattern leaning against two tyres of the highway pattern.
12. The tyres were kept in a store room on racks. The racks were not labelled in any way.
13. The tyres were leaning against each other, two highway pattern tyres were together and leaning against two mud pattern.
14. There was nothing in the way of signage to indicate the size of the tyres.
15. Before the incident I did not know the size of the two patterns were different. I know that the sizes are marked on the wall of the tyre but often with retreads you can’t read the markings.
16. I chose a tyre of the same pattern and took it to my work mate Michael Kane. Michael had taken the wheel off the trailer and he was taking the tyre off as I got the replacement.
17. Michael put a tube in the replacement and proceeded to fit it to the rim. He then took the wheel to a cage where it’s fitted with an air hose.
18. In the course of pumping the tyre up the tyre blew from the rim.
19. There was no damage done to the tyre and no one was hurt. The safety cage had done its job.” 3
[11] It is helpful to consider the context of workplace safety in Australia. Safety legislation and in-house safety measures exist to anticipate and help prevent mistakes. Mistakes are anticipated by the workplace structures governing employment. Accidents often occur as a result of mistakes by ordinary, honest, well intentioned employees performing their work in an ordinary fashion. That is why employers are obliged to have safety programmes and workers’ compensation insurance, and it is also why occupational health and safety legislation exists. It is also why access to workers’ compensation entitlements is not, apart from exceptional circumstances, fault based. The test is whether or not a worker was injured in the course of his or her employment. Underlying this legislation is the understanding that workers can unintentionally make mistakes and injure themselves and sometimes injure others.
[12] Making a mistake in the course of employment can be a valid reason for the termination of employment of an employee. However, it would be an error to fail to distinguish between conduct which is constituted by a single error, a number of single errors, a series of careless acts, or a course of conduct which demonstrates reckless indifference to safety. Accidents happen even to the most careful of employees. All it takes is a momentary inadvertence. What the mistake was, what the context was, what the previous workplace record of the employee was and what the safety record of the employer was are all relevant matters to consider when deciding whether a termination of employment for such conduct was harsh, unjust or unreasonable.
[13] In this case Mr McMillan and Mr Kane did not conduct one joint act of carelessness. Each of them committed a separate act of carelessness. It was the combination of these two separate acts of carelessness which caused the tyre to explode. I have concluded that the applicants’ conduct was inadvertent, not wilful, and that it did not demonstrate a serious disregard for workplace safety. I consider that it would be unfair to each applicant to consider the two acts as one joint act and impose a higher level of scrutiny and criticism as a result.
[14] I accept the evidence of both applicants that they had often been instructed to use tubes in tubeless tyres. All tube tyres must have a tube in them. Tubeless tyres can have a tube in them. This is safe if the rim is the appropriate configuration. It must be square not chamfered. This allows tyres to be inflated by hand if a puncture occurs without access to a workshop. This can be very helpful in rural areas. 4
[15] All parties agreed that this was an event with potentially dangerous outcomes for employees and others. I accept Mr Orton’s evidence in this regard. 5
[16] All parties also agreed that Beaurepaire took its safety record seriously and that it had gone to some trouble to explain its policies and communicate its attitude to safety to all employees through the provision of memoranda which was distributed regularly, by the conduct of safety meetings, and by the visits of senior staff to address particular issues.
[17] Beaurepaire submitted that Mr Kane and Mr McMillan had had an unsatisfactory attitude to safety meetings in the course of their employment prior to the incident of 1 October 2009. Both applicants were extensively cross-examined regarding this issue. Not only am I not satisfied by the evidence of Mr Orton and Mr McKenzie that Mr Kane and Mr McMillan had an unsatisfactory attitude to safety and safety meetings, I am, on the contrary, positively satisfied that both Mr Kane and Mr McMillan had a good attitude to safety and safety meetings during the course of their employment. Both applicants attended the safety meetings and both applicants answered questions at such meetings. Both applicants developed a simple device for storing tools and thereby reducing the risk of injury. This was undertaken at their own initiative and was referred to by Beaurepaire in its safety memoranda as an example of a safe process.
[18] I accept that neither Mr Kane nor Mr McMillan danced and leapt about with enthusiasm at staff safety meetings. These meetings occurred after hours and they required that they be paid. Mr Jacobs submitted that this requirement was part and parcel of their poor attitude to safety. I disagree. 6 Mr Orton’s evidence was that they did not engage, they did not participate and did not make eye contact. I am satisfied that the applicants did not emulate the conduct of the effusive Mr George, but I am also satisfied that both applicants, to the extent that could be reasonably expected of any employee with a positive attitude, had a good attitude to safety and the safety meetings.
[19] Although I have concluded that there were occasions when both applicants considered the meetings to be a bit of a joke, either because there was no specific matter for discussion and/or because the meetings became occasions for general discussion, I am satisfied that neither applicant considered the subject of safety to be a joke.
[20] Mr Orton appears to have expected more than correct answers to questions at these meetings. He wished for involvement, enthusiasm and expansive responses. I asked Mr Orton what he expected other than the correct answers to the questions he asked at the meetings. He was unable to satisfy me that there had been a poor attitude by the applicants. I have concluded that his was an unrealistic expectation. It was also a retrospective criticism. Although Mr Orton and Mr McKenzie both gave evidence that they had had a continuing dialogue between themselves concerning the poor attitude of Mr Kane and Mr McMilllan to safety, the subject of that dialogue was never communicated to either applicant. Nothing was ever raised with either applicant by conversation or by correspondence to indicate an unsatisfactory level of participation. There was no counselling. I have concluded that if this issue was a serious issue it would have been raised.
[21] Despite the time Mr Jacobs spent on this issue at arbitration, he was anxious not to characterise it as one that was relied upon as a reason for the termination of employment of either Mr Kane or Mr McMillan. Perhaps as strongly as Beaurepaire’s final position on this issue can be stated is that it was something both Mr Orton and Mr McKenzie thought was consistent with what Mr McKenzie described as the attitude of Mr Kane and Mr McMillan when their employment was terminated. 7
[22] Mr Kane’s evidence was that he fitted 30 to 40 tyres a day. Mr McMillan’s evidence was that he fitted 20 to 30 tyres a day. Mr McKenzie agreed that the rate was probably 20 to 30 tyres a day. A history of fitting 20 to 30 tyres a day without incident, from commencement of employment to the date of termination, is not a standard consistent with a bad attitude to work safety. I have had regard to this.
[23] I have had regard to the evidence of Mr McMillan and Mr Kane regarding their interviews with Mr McKenzie. All three participants are grown men who had worked together for some time in a tyre fitting shop, not in the haberdashery department of David Jones. Swearing can be a valid reason for termination of employment. Swearing in these circumstances was predictable, but I do not intend to resolve what particular words were spoken at the time. In all the circumstances of this case I do not consider any swearing, on either version, to be a further reason for the termination of employment of either applicant. I have concluded that neither applicant laughed inappropriately in the interview. I prefer the evidence of Mr Kane and Mr McMillan to that of Mr McKenzie as to the conduct and conversation of the participants in the termination interviews.
[24] Mr Orton and Mr McKenzie were dissatisfied with the applicants’ response at the termination of employment. The applicants’ explanation was that it was a mistake. That was all they had to say. Mr Orton in particular seemed to expect outpourings of remorse. Mr Kane and Mr McMillan are not extensively educated and articulate men. They are tyre fitters and manual labourers. Their response, in the circumstances, appeared reasonable to me. I consider Mr Orton’s dissatisfaction unrealistic.
[25] I have considered Mr Kane’s failure to immediately identify Mr McMillan as an employee who contributed to the incident. He initially took the blame himself and did not identify Mr McMillan until pressed. Though the conduct was understandable, I have concluded that this was unsatisfactory conduct which amounted to a valid reason for the termination of employment of an employee.
[26] I have considered the two earlier accidents at Beaurepaire sites which were referred to in the evidence. Mr Morgan relied upon those accidents as examples of inconsistent treatment of other employees compared to the treatment of Mr Kane and Mr McMillan. Mr Jacobs distinguished those accidents on their facts. I am not persuaded that the Queensland accident was distinguishable on its facts but I do not think it is necessary for me to consider those two accidents in relation to this application. I have decided that this application is best dealt with on its own facts and that is how I have dealt with it.
[27] I have considered the matters set out in s.387 and I have dealt with them below.
[28] There was a valid reason for the termination of the employment of Mr Kane arising from his error in fitting a tyre of the wrong size. There was also a valid reason for the termination of the employment of Mr Kane arising from his failure to immediately identify Mr McMillan as an employee who also made a mistake which contributed to the explosion of the tyre.
[29] There was a valid reason for the termination of the employment of Mr McMillan arising from his error in providing Mr Kane with a tyre of the wrong size.
[30] Both applicants were notified of the reason for their termination of employment as it related to their specific acts of carelessness and they were provided with an opportunity to respond. However, I have concluded that neither was given sufficient notice or opportunity to respond to the question of whether their response to Mr McKenzie was inadequate or, to the extent that it provided a context, that their previous attitude to safety was a consideration. It would have been fairer to both Mr Kane and Mr McMillan if a greater opportunity had been provided to them to provide reasons for why their employment should not be terminated.
[31] There was no unreasonable refusal by Beaurepaire to allow a support person to attend. Neither Mr Kane nor Mr McMillan requested such a person.
[32] The criteria outlined in s.387(e), (f) or (g) are not relevant to this matter.
[33] I have given consideration to the fact that both of the applicants were dismissed summarily. No notice was paid. I have concluded that neither the conduct of Mr Kane nor of Mr McMillan, was conduct that justified a summary termination of their employment. I have given consideration to this issue.
[34] I have considered the financial hardship suffered by Mr Kane and Mr McMillan following the termination of their employment.
[35] In determining whether a particular termination is harsh, unjust or unreasonable consideration can be given to whether the penalty of termination is excessive or inappropriate. See Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 465 per McHugh and Gummow JJ.
“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 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.”
And
“Procedures adopted in carrying out the termination might properly be taken into account in determining whether the termination thus produced was harsh, unjust or unreasonable”. 8
[36] The conduct of Mr Kane and Mr McMillan relating to the exploding tyre, was not one of a number of errors, part of a series of careless acts, or part of a course of conduct which demonstrated a reckless indifference to safety. Their conduct was a single act of carelessness by each applicant.
[37] I find that the terminations of employment of both Mr Kane and Mr McMillan on 1 October 2009 were harsh. The terminations were disproportionate to the gravity of the misconduct in respect of which each applicant acted.
[38] Mr McMillan does not seek reinstatement. He has relocated to Darwin to seek work. In the circumstances I consider reinstatement is inappropriate. I consider compensation to be an appropriate remedy. I have therefore given consideration to what compensation should be paid to Mr McMillan in lieu of reinstatement.
[39] I have had regard to the criteria set out in s.392.
[40] I do not consider that any order I make regarding compensation payable to Mr McMillan will have any effect on the viability of Beaurepaire’s enterprise.
[41] The length of Mr McMillan’s service was a mutual consideration.
[42] I have had regard to the remuneration that Mr McMillan would have received had he not been dismissed.
[43] I have had regard to the efforts Mr McMillan has made to mitigate his loss. He has been substantially without work since the termination of his employment. He has been less successful than Mr Kane in finding new work but I have concluded that he made genuine efforts to obtain work. As indicated he has now moved to Darwin to facilitate this.
[44] Given my findings regarding the summary nature of his dismissal Mr McMillan would also be entitled to notice pursuant to his contract of employment.
[45] Mr McMillan is entitled to the maximum compensation pursuant to the Act. I will issue separate orders to this effect.
[46] Mr Kane seeks reinstatement. I have considered the evidence and have given consideration to all of those matters to which my attention is directed by s.390 of the Act. I have decided to allow the parties a further two weeks to confer concerning remedy. If this issue cannot be resolved by agreement I will issue further reasons for decision and an order in relation to Mr Kane.
SENIOR DEPUTY PRESIDENT
1 Transcript PN829-833
2 Exhibit Kane McMillan 1 para 5-13
3 Exhibit Kane McMillan 3 para 8-19
4 Transcript PN1533-1538
5 Exhibit Wingfoot Australia 5 para 22-31
6 Transcript PN1096-1098
7 Transcript PN461-475, 1464-1473
8 (1995) 185 CLR 410 at 465 per McHugh and Gummow JJ
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